The difference between Current Assets and Current Liabilities. Represents the liquid funds available for day-to-day operations. Positive working capital means the business can cover its short-term obligations.
How to calculate it
Working capital = current assets − current liabilities. Positive working capital is not automatically available cash because much may be tied up in inventory and receivables.
With $160,000 in current assets and $100,000 in current liabilities, working capital is $60,000.
Where this connects to Impresa
You may encounter this concept when reviewing Cash Flow Engine. Start with the underlying inputs and check the applicable reporting period before interpreting the result.
Read the Cash Flow Engine guideDefinitions here explain the concept. Accounting treatments, formulas, and industry comparisons may vary. Use your own records and qualified advice for material decisions.