Calculating working capital is essential to maintaining a healthy balance sheet and cash flow. Working capital is a measure of your company’s liquid financial assets, representing the funds you have available to pay debts and operate on a daily basis. It’s calculated by taking your current assets (such as cash and accounts receivable) and subtracting from that figure the sum of your current liabilities (like accounts payable and short-term debt). The resulting number represents the amount of money on hand that you can use for day-to-day operations or invest in future endeavors. With a little bit of know-how and a lot of discipline, you’ll be able to keep your working capital optimized for maximum efficiency — turning every penny into maximum productivity!