How do you find working capital?

Formula. The net working capital formula is calculated by subtracting the current liabilities from the current assets. Here is what the basic equation looks like. Typical current assets that are included in the net working capital calculation are cash, accounts receivable, inventory, and short-term investments. read more

Subtracting the company's current liabilities from its current assets gives us a working capital of $1.2 million. That's very good. The Importance of Working Capital By definition, a company should have sufficient working capital on hand to pay all its bills for a year. read more

Working capital represents a company's ability to pay its current liabilities with its current assets. Working capital is an important measure of financial health since creditors can measure a company's ability to pay off its debts in the short term or less than one year. read more

The net working capital formula is calculated by subtracting the current liabilities from the current assets. Here is what the basic equation looks like. Typical current assets that are included in the net working capital calculation are cash, accounts receivable, inventory, and short-term investments. read more