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Home > QFINANCE Dictionary > Definition of net working capital

Definition of

net working capital

Accounting

assets minus liabilities the amount by which the value of a company's current assets exceeds its current liabilities.

Related definitions of "net working capital"

Recommended Further Reading (Term count)
  • Managing Working Capital
    This checklist explains what working capital is and how it is used.
  • Navigating a Liquidity Crisis Effectively
    by Klaus Kremers
    Until 2007, debt had become very cheap and accessible. Most companies sharply increased their leverage. In Germany, for example, the net-debt-to-EBITDA ratio extremes moved from around 3 in 2002 to around 7 in early 2008. However, a downturn in company performance or an external financial crisis—where lending becomes scarce and borrowing expensive—can make this approach risky.
  • Best-Practice Working Capital Management: Techniques for Optimizing Inventories, Receivables, and Payables
    by Patrick Buchmann, Udo Jung
    Many companies still underestimate the importance of working capital management as a lever for freeing up cash from inventory, accounts receivable, and accounts payable. By effectively managing these components, companies can sharply reduce their dependence on outside funding and can use the released cash for further investments or acquisitions. This will not only lead to more financial flexibility, but also create value and have a strong impact...
net working capital - Related Articles

  • Working Capital

    Calculations

    The funds that are readily available to operate a business. Working capital comprises the total net current assets of a business, which are its inventory, debtors, and cash—minus its creditors.

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Definitions of ’net working capital’ and meaning of ’net working capital’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’net working capital’ and other financial terms with our online QFINANCE Financial Dictionary.

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