What is working capital

Question

Accepted Answer

Working capital is the measure of a company's liquidity and operational efficiency.

Working capital is the difference between a company's current assets and current liabilities.
It represents the funds available for day-to-day operations and short-term obligations.
Positive working capital indicates a company's ability to meet its short-term financial obligations.
Negative working capital suggests a company may struggle to pay off its short-term debts.
Working capital management involves optimizing the balance between current assets and liabilities.
Examples of current assets include cash, inventory, and accounts receivable.
Examples of current liabilities include accounts payable, short-term loans, and accrued expenses.

Accepted Answer

Current assets - current liability

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