Working capital is a financial metric that measures the operational liquidity of a business. It is calculated by subtracting total current liabilities from total current assets. Working capital is an extremely important indicator of a company’s overall financial health and reflects its ability to cover short-term obligations with available liquid resources. A negative working capital can be an indication of trouble for a company, as it means it has more debts than liquid assets. On the other hand, a positive working capital suggests the business will have no difficulty meeting its short-term liabilities.