Calculating net working capital is an essential part of keeping any business afloat. It’s a measure of a company’s short-term liquidity, meaning how much money the business has to cover its operating expenses. Net working capital is calculated by subtracting current liabilities from current assets. This calculation allows management to get a clearer picture of the company’s cash flow situation and make better decisions about how to manage their finances. By understanding your net working capital, you can ensure that your business is always in a healthy financial position.