Working Capital

RECENT NEWS
The Value at Risk  Nov 6  Comment 
The term liquidity can be interpreted in various ways, depending of course upon the specific circumstances. In corporate financial accounting, liquidity refers to the firm's ability to pay its debts when they are due. The importance of possessing...
The Times of India  Oct 7  Comment 
National carrier Air India is understood be in negotiations with state-run banks to avail working capital loans at low interests, Air India sources said.
Cloud Computing  Oct 2  Comment 
TradeBeam, the leader in SaaS-based global trade management solutions (GTM), today announced that it will present a webinar with GM Holden and AMR research on October 7 to discuss how companies who desire an agile,...
Insurance Journal  Aug 28  Comment 
New research by Marsh has found that senior executives at Europe's leading retail and consumer brands businesses will be concerned by risks such as cash flow, credit risk and trade credit over the ...
The Curious Investor  Aug 27  Comment 
I've talked a lot about net working capital in several of my posts. In fact, I used it in my post this Monday when trying to determine Apple's distributable cash. For those that felt lost, I had once described this process in my post on how to...
Investing School  Aug 2  Comment 
Net Working Capital (which is also known as “Working Capital” or the initials “NWC”) is a measurement of the operating liquidity available for a company to use in developing and growing its business. The working capital can be calculated...
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Working Capital is a measure of a company's short term liquidity or its ability to cover short term liabilities. Working capital is defined as the difference between a company's current assets and current liabilities. That is,

Working Capital = Current Assets - Current Liabilities.

Analysts use working capital to determine how easily a company can meet its liabilities over a short time horizon. It is also used when calculating other financial metrics like free cash flow. When management uses working capital as a basis for business decisions their goal is to make sure the company is able to continue its operations in the short term while covering any near-term debt as well as operating expenses.

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