Share this site with del.icio.us Share this site with digg Share this site with reddit Share this site with technorati Share this site with furl Share this site with stumbleupon Share this site with google Add this site to Yahoo Bookmarks Click here to add us to your favorites Subscribe to our Feed





working capital

Definition 1

General: Cash available for day to day operations of a firm. Strictly speaking, one borrows cash (and not working capital) to be able to buy assets or to pay for obligations. Also called current capital.

Definition 2

Accounting: Net liquid assets computed by deducting current liabilities from current assets. Sources of working capital are (1) net income, (2) long-term loans (non-current liabilities), (3) sale of capital (non-current) assets, and (4) injection of funds by the owners (stockholders). Amount of available working capital is a measure of a firm's ability to meet its short-term obligations. Ample working capital allows management to avail of unexpected opportunities, and to qualify for bank loans and favorable trade credit terms. In the normal trade cycle of a firm, working capital equals working assets.

Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z