What is working capital



0
What is working capital

2 Answer(s)


0

Working capital is the value of current assets minus current liabilities for any company.

2

Its the capital of a business which is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities.
If the ratio is less than one then they have negative working capital.
A high working capital ratio isn't always a good thing, it could indicate that they have too much inventory or they are not investing their excess cash.