Question

define working capital​

Answer 1

Answer:

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The capital of a business which is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities.

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Answer 2

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WORKING CAPITAL is defined as the funds which are used in the day to day business operations of a company.

The efficient management of working capital is important for both, the profitability and the financial health of the company.

In layman’s term, every company needs a cash reserve to manage their daily running cost and that is known as the Working Capital.

Working capital is calculated as:

Working Capital = Current Assets - Current Liabilities

• Current Assets → Inventory, cash, and account receivables
• Current Liabilities → Account Payables And Short Term Loans