In a Limited Partnership, the day-to-day operations are run by the general partners. General partners actively manage the business and take on the liability for the partnership’s obligations. Limited partners contribute capital and share in profits but are typically passive investors with liability limited to their investment. The partnership agreement may specify who the general partners are and how many there are, but the key idea is that those who actually run the business are the general partners rather than the limited partners (or a corporate entity acting alone).

EBITDA isolates operating performance by focusing on earnings generated from core business activities while stripping out financing decisions, tax environments, and non-cash accounting charges. It stands for earnings before interest, taxes, depreciation, and amortization, so it excludes interest (financing effects), taxes (tax environment), and depreciation and amortization (non-cash allocations tied to past investments). This makes it a useful rough measure of how well the business is operating on its own, and it helps compare companies with different debt levels and asset ages. Net income after tax includes financing and tax effects, so it isn’t a clean view of operating performance. Cash flow from operations reflects liquidity rather than earnings from operations. Gross profit shows only the direct profitability of goods/services before other operating costs, so it doesn’t capture overall operating performance.

Net working capital measures a company’s short-term liquidity—the cushion available to run day-to-day operations. It is calculated as current assets minus current liabilities. Current assets are items that can be converted to cash within a year (cash, receivables, inventory, etc.), while current liabilities are obligations due within a year (payables, short-term debt, accrued expenses). A positive result means the firm can cover its near-term obligations with its near-term assets, while a zero or negative result signals potential liquidity issues or reliance on short-term financing. The given expression matches this concept, making it the correct choice. The other options either describe equity (total assets minus total liabilities), or reverse the order (current liabilities minus current assets), or list only a subset of current assets (cash plus accounts receivable) rather than the net difference.

When a firm finances an asset increase with new equity, the total assets rise and the owners’ claim (equity) rises by the same amount, while liabilities stay unchanged. This follows the accounting equation: assets = liabilities + equity. Issuing new equity adds cash or other assets and increases equity, so both sides of the equation grow by the same amount, keeping liabilities constant. So the asset side increases, liabilities remain unchanged, and equity increases by the same amount. The other scenarios would contradict the effect of issuing new equity.