Working Capital

This refers to the funds available to a business to operate on a day-to-day basis.

Working capital represents the business’s net liquid assets (current assets less current liabilities) and takes the form of net income, long term loans, sales of assets and stockholder’s funds. Positive working capital is required to cover operating expenses and any maturing debt.

Working capital is a term used in all financial management and financial reporting. Explore our learning zone to discover more