Net Working Capital (NWC) is a measure of a company’s liquidity and overall financial health. It is calculated by subtracting current liabilities from current assets, which are all the assets expected to be converted into cash within one year. A positive NWC is an indication that a company has enough resources to meet its short-term obligations and maintain operational efficiency while a negative NWC indicates the opposite. Knowing your business’ NWC can help you make sound decisions on investments, capital management, and other strategic initiatives.