Difference between revisions of "Working Capital"
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| + | Working capital, also known as net working capital (NWC), is the difference between a company’s current assets—such as cash, accounts receivable/customers’ unpaid bills, and inventories of raw materials and finished goods—and its current liabilities, such as accounts payable and debts. It's a commonly used measurement to gauge the short-term health of an organization.<ref>[https://www.investopedia.com/terms/w/workingcapital.asp Working Capital: Formula, Components, and Limitations]</ref> | ||
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Working capital indicates the liquidity levels of businesses for managing day-to-day expenses and covers inventory, cash, accounts payable, accounts receivable and short-term debt. It is an indicator of the short-term financial position of an organization and is also a measure of its overall efficiency.<ref>[https://www.bajajfinserv.in/what-is-working-capital Working Capital Definition and Meaning - Bajaj Finserv]</ref> | Working capital indicates the liquidity levels of businesses for managing day-to-day expenses and covers inventory, cash, accounts payable, accounts receivable and short-term debt. It is an indicator of the short-term financial position of an organization and is also a measure of its overall efficiency.<ref>[https://www.bajajfinserv.in/what-is-working-capital Working Capital Definition and Meaning - Bajaj Finserv]</ref> | ||
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== See Also == | == See Also == | ||
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Latest revision as of 12:18, 20 January 2023
Working capital, also known as net working capital (NWC), is the difference between a company’s current assets—such as cash, accounts receivable/customers’ unpaid bills, and inventories of raw materials and finished goods—and its current liabilities, such as accounts payable and debts. It's a commonly used measurement to gauge the short-term health of an organization.[1]
Working capital indicates the liquidity levels of businesses for managing day-to-day expenses and covers inventory, cash, accounts payable, accounts receivable and short-term debt. It is an indicator of the short-term financial position of an organization and is also a measure of its overall efficiency.[2]
See Also