Definition
Working Capital is the difference between a company`s current assets and current liabilities, indicating the liquidity available to run its operations and manage short-term financial obligations effectively.
Frequently asked questions
What is the difference between working capital and current assets?
Working capital is the difference between current assets and current liabilities, while current assets are all assets that can be converted to cash within a year.
What is the definition of working capital?
Working capital is the difference between a company`s current assets and current liabilities, used to fund day-to-day operations.
Is working capital a liquidity or efficiency?
Working capital is mainly a measure of liquidity, showing a company`s ability to meet short-term obligations.