Working capital meaning: Working capital is the difference between the

Working capital is the difference between the current assets and the current liabilities of a company. In simple words, it is the funds available to a business for its day-to-day operations. Auditors and managers use this financial metric to evaluate the short-term financial health of a business. Read along to learn different aspects of working capital like its meaning, types, formula, and examples. Working capital is basically the money a business has left after paying off what it owes in the short term. It’s calculated as: Working Capital = Current Assets – Current Liabilities. Think of it as a quick health check for your business’s finances. Working capital is a fundamental concept in the world of business. Simply put, it is the difference between a company’s current assets and its current liabilities. In other words, it represents the amount of money a company has available for its day-to-day operations. Working capital is a critical metric for businesses of all sizes, as […] Learn how to calculate working capital, a financial metric that measures a business’s liquidity and ability to cover day-to-day expenses. Find out how to use working capital ratios, such as quick and current, to assess your short-term financial health and operational efficiency.