working capital

Definition

Current assets minus current liabilities. Working capital measures how much in liquid assets a company has available to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In general, companies that have a lot of working capital will be more successful since they can expand and improve their operations. Companies with negative working capital may lack the funds necessary for growth. also called net current assets or current capital.

Use working capital in a sentence

During the process of growing a company it is important to have a positive working capital number to ensure that you have funds on hand to expand.

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