Subtract current liabilities from current assets to measure the cushion that keeps the business running day to day.
Net working capital = current assets − current liabilities. Positive means the business can cover short-term obligations and fund operations; negative signals a potential cash crunch. Very high can mean cash or inventory sitting idle. Ideal levels vary by industry and growth stage. General information only.
Working capital is what's left when you subtract what the business owes soon from what it owns that's cash or soon-to-be-cash. It funds payroll, inventory, and the gap between paying suppliers and getting paid. Positive working capital is breathing room; negative means bills could outrun available cash.
Net working capital = current assets − current liabilities
Up to a point. Enough to operate comfortably is essential, but a very high figure can mean cash or inventory sitting idle instead of being invested in growth.
Yes — some (like fast-turn retailers) collect from customers before paying suppliers, running lean by design. Context matters; compare to your industry.
Related: current ratio calculator · quick ratio calculator · cash conversion cycle calculator · all free calculators.
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