The difference between a company's current assets and current liabilities. It's also known as net working capital (NWC). Working capital is used to purchase inventory, pay short-term debt, and day-to-day operating expenses. It's critical for keeping a business operating smoothly.
Working capital is a financial metric that helps plan for future needs and ensure the company has enough cash to meet short-term obligations. It's an indicator of the short-term financial position of an organization and is also a measure of its overall efficiency.