Working Capital

Working Capital is a financial metric that represents the difference between a company’s current assets (e.g., cash, accounts receivable, inventory) and its current liabilities (e.g., accounts payable, short-term debt) within a specific period. It measures the company’s liquidity, operational efficiency, and short-term financial health, indicating its ability to meet short-term obligations and fund day-to-day operations. Working capital management is critical for maintaining solvency and supporting business growth.