Working capital is an indicator of what aspect of a company's performance?

Working capital is a financial metric that reflects the short-term financial health of a company. It is calculated as current assets minus current liabilities, providing insight into the company’s liquidity and operational efficiency. Essentially, working capital is an indicator of a company's ability to meet its short-term obligations, which is crucial for maintaining operations and avoiding financial distress.

A positive working capital indicates that a company has enough assets to cover its current liabilities, signifying a favorable ability to survive in the near future. This aspect is particularly important for assessing whether a company can finance its day-to-day operations, pay suppliers, and manage unexpected expenses without requiring additional financing. Therefore, the correct choice emphasizes the company’s capacity to maintain solvency and operational continuity in the short term.

Other aspects like long-term growth potential or investment returns relate more to strategic planning and overall market performance rather than immediate operational health. While market share and competitive advantage are important for a company’s position in the industry, they do not directly measure liquidity or the ability to manage immediate financial responsibilities.