What is the outcome when current assets exceed current liabilities?

When current assets exceed current liabilities, the situation indicates a positive working capital. This concept is crucial as it reflects a company's short-term financial health; specifically, it signifies that the business has sufficient assets that can easily be converted to cash in the near term to cover its short-term obligations.

Positive working capital is essential for maintaining day-to-day operations, ensuring that the business can pay off its current liabilities without needing to secure additional financing or liquidate long-term investments. A healthy working capital position is often associated with liquidity and operational efficiency.

The other options do not align with the implications of having current assets greater than current liabilities. For instance, increased debt or increased liabilities would suggest financial strain or a reliance on borrowed funds, which is not the case when working capital is positive. A negative current ratio would imply that current liabilities exceed current assets, which contradicts the scenario being discussed.