Working Capital

What is Working Capital?

Working capital is the finance employed in a business which is utilised to carry out it’s normal day to day trading operations. It is the net liquid assets of a business. In a simple business it would be calculated as inventory + accounts receivable – accounts payable representing the funding needed to buy inventory and provide credit to customers reduced by the amount of credit obtained from suppliers.

For further information on Working Capital see the Wikipedia definition.

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Last modified December 19th, 2017 by Team

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