Skip to main content
Return to homepage
  • Free Trial
  • Free Trial
  • Plans
    • Plans for Individuals
    • Plans for Teams
    • Plans for Clients
    • Plans for Enterprise
  • Solutions
    • Self Educators
    • Small Business
    • Industry Associations
    • Accounting Firms
    • Franchise Groups
    • Finance Brokers
    • Corporations
    • Business Schools
  • More
    • About
    • Features
    • Experts
    • Blog
    • Media
    • Press
    • Contact
  • Support
  • Login
    • Watch
    • Admin

Home Definitions

What is Working Capital? Definition or Meaning

Posted by Bizversity

Working capital measures a company’s short-term financial health. As a formula, this is calculated as current assets minus current liabilities. A negative value could indicate that the company is going to run into financial troubles as it owes more than it owns. Too big a positive number can be bad too as it suggests the company is not investing wisely.

For example…

Harry’s used car business makes a killing over any holiday period, so at those times, Harry’s working capital is usually a small positive but in those other ‘quiet times’, the working capital is mostly negative, suggesting that the value of all his cars combined is worth less than the debts the business has.

Bizversity
Bizversity

  • Facebook
  • YouTube
  • Twitter
  • LinkedIn
  • Instagram

Our Mission is to grow the people that move the world forward. Because business people change things. They learn, they create, they build, they disrupt. And when they do, they influence the people around them and the world becomes a better place. So if you are an entrepreneur, business leader, executive or startup, and you want to grow, welcome to Bizversity.

  • About
  • Blog
  • Features
  • Tutorials
  • Media
  • Press
  • Careers
  • Definitions
  • Questions
  • Support
  • Contact

Copyright © 2023 Bizversity
  • Privacy Policy
  • Disclaimer
  • Terms of Service
  • Website Terms of Use