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What is working capital?
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What is the difference between working capital and net working capital?
What is a working capital cycle?
Jun 27, 2024 · Working capital is the difference between a company's current assets and liabilities. It measures its liquidity and short-term financial health. Learn how to calculate working capital and its components, and see examples of positive and negative working capital.
- Jason Fernando
- 2 min
Working capital is the difference between current assets and current liabilities. It is not to be confused with trade working capital (the latter excludes cash). The basic calculation of working capital is based on the entity's gross current assets.
Jun 29, 2024 · In simple terms, working capital is the net difference between a company’s current assets and current liabilities and reflects its liquidity (or the cash on hand under a hypothetical liquidation).
Dec 27, 2022 · Working capital is a measure of a company's liquidity. Essentially, it assesses short-term financial health since it shows whether a company has enough cash to keep running. For reference, liquidity refers to the conversion of assets into cash.
Working capital—also known as net working capital—is a measurement of a business’s short-term financial health. Simply put, it indicates your liquidity or ability to pay your bills. You can find it by taking your current assets and subtracting your current liabilities, both of which can be found on your balance sheet.
Aug 22, 2022 · Working capital is the difference between current assets and current liabilities on a company's balance sheet. It measures its ability to meet short-term obligations and fund growth. Learn how to calculate working capital and why it's important for finance teams.
Nov 30, 2020 · Working capital is money that’s available to a company for its day-to-day operations. Simply put, working capital indicates a company's operating liquidity and efficiency.
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