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Working capital

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Working capital (also known as net working capital) is a financial metric which represents the amount of day-by-day operating liquidity available to a business. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. It is calculated as current assets minus current liabilities. A company can be endowed with assets and profitability, but short of liquidity, if these assets cannot readily be converted into cash.

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This entry includes content from the following Wikipedia article: Working capital

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This term or phrase is currently an entry in The SmallBusiness.com Business Glossary WIKI. Please help expand this entry into a more detailed description.