Working Capital Stands For Raw materials and money in hand
Working capital is also known as Net Working Capital(NWC).
It is the difference between a company’s current assets like cash, accounts receivable/customers’ unpaid bills, inventories of raw materials, finished goods, and current liabilities.
Working capital is funds required to run a company’s day-to-day operations. It is the indicator of the short-term financial position of a company & also measure’s a company’s overall efficiency.
It is calculated by deducting all current liabilities of a company from its current assets.
If a company has substantial positive Net Working Capital, then it will have the potential to invest and grow.
Working capital is the total amount of capital invested into your company’s operating cycle.