Working Capital

« Back to Glossary Index

The formula for working capital is Current assets – Current liabilities. Working capital helps you know the financial health of your business in the short-term. A positive value tells you how much of a cushion you have. If negative, it means that your business is in a bad position as it is likely to meet its obligations in the short term.


Kindly note that this is not financial advice.Our website services, content and products are for general informational and educational purposes only and is not a substitute for professional advice. We remind our readers to be careful with their money.You should NOT rely upon the information or opinions you read. Preferably, you should use what you read here as starting points for doing independent research on companies, products and investing techniques. Then judge for yourself the worthiness of the material that has been shared in our website.

« Back to Financial Terms Dictionary