Business Working Capital is the difference between current assets and current liabilities. It is an important indicator of a company’s financial health and is used to measure the liquidity of a business. Simply put, it is the capital available to a business to pay for expenses and meet short-term obligations. It is also known as “operating capital” and can be calculated by subtracting total current liabilities from total current assets. A positive working capital indicates that a business has enough cash flow to finance its operations and pay back debts when they come due.
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