Average Working Capital Formula is a calculation used to measure the liquidity and operational efficiency of a business. It helps businesses understand how much money they have available to pay their expenses, invest in future growth, or replenish inventory. The formula is calculated by taking the total current assets and subtracting total current liabilities. Average Working Capital represents the amount of money a business has on hand at any given time; it is the average value of a company’s assets minus its liabilities. By understanding this metric and using it to inform important business decisions, businesses can ensure they are running efficiently and more likely to be successful over the long term.