Definition of
working capital
firm's money available for trading the funds that are readily available to operate a business.
Working capital comprises the total net current assets of a business minus its current liabilities.
Current assets − Current liabilities
Current assets are cash and assets that can be converted to cash within one year or a normal operating cycle; current liabilities are monies owed that are due within one year.
If a company's current assets total $300,000 and its current liabilities total $160,000, its working capital is:
$300,000 − $160,000 = $140,000
Related definitions of "working capital"
- Abbr WC
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