Net Operating Working Capital (NOWC) is the measure of a business’s short-term liquidity. It’s calculated by taking the sum of all current assets and subtracting the sum of all current liabilities. The result gives you an estimation of how much a business has available to cover its operation costs without relying on external financing. By examining NOWC, businesses can get a better idea of their overall financial health and stay one step ahead of potential cash flow difficulties. Knowing your NOWC also makes it easier to plan for future investments while keeping a handle on daily operating costs. Put simply, NOWC helps businesses keep the money coming in and going out in sync.