How is working capital defined in a financial context?

Working capital is defined as the difference between a company's current assets and current liabilities. It represents the amount of cash available to a business to cover its short-term operational needs after its current liabilities have been settled. In the context of option B, working capital can be thought of as the cash available for day-to-day operations once obligations are met.

This is crucial for understanding a company's liquidity position and ability to finance its immediate expenses, such as payroll, inventory purchases, and other operational costs. Adequate working capital allows a business to maintain smooth operations and to grow without running into cash flow issues.

In contrast, the other options address different financial metrics that do not accurately capture the essence of working capital. Total assets encompass everything a company owns, which is broader than just the cash flow aspect. Total equity refers specifically to the value owned by shareholders and does not focus on liquidity. Lastly, projected income over a period relates to profitability rather than a company's current ability to meet its obligations. Thus, the defining characteristic of working capital as it pertains to available cash after settling liabilities makes option B the correct choice.