Working capital meaning: What is Working Capital

What is Working Capital? Working Capital is the amount of funds necessary to cover the cost of operating the enterprises. Working capital means the funds (capital) available and used for day-to-day operations (working) of an enterprise. It consists broadly of that portion of assets of a business that are used in or related to its current ... 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. 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 one of the most critical financial metrics for any business, yet it’s often misunderstood or overlooked. At its core, working capital represents the difference between a...