Working Capital
Working capital is also called net working capital and refers to operating liquidity available to a company’s business, a total amount of assets that are ready to convert to cash immediately or in very short term.
Working capital is calculated as the difference between current assets and current liabilities. Companies with positive working capital are able to pay their short-term liabilities, while companies with negative working capital must improve their current assets (accounts receivable, cash or inventory) in order to meet short-term liabilities. In general, the more working capital one company has the biggest possibilities it has to grow and expand its business.
Working capital is also called current capital or net current assets.
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