Definition: Working capital refers to the difference between a company’s current assets and current liabilities. In lay man terms… It is a measure of a company’s short-term financial health and operational efficiency. Working Capital = Current Assets − Current Liabilities Where: Current Assets include cash, accounts receivable, inventory, and other assets expected to be converted into cash within one year. Current Liabilities include accounts payable, short-term debt, and other obligations due within a… Read More
Shandal CPA | Accounting Blog