Question

Difference between gross working capital and net working capital

Answer 1

Thnkx for question

Ans......

Working Capital= It refers to that capital

which helps the business in dealing with

day to day working.....

Working Capital

• Gross
• Net ....

Gross WC v/s Net WC

(1) It refers to sum▪️ (1) It refers to ex-

total of all assets ▪️ -cess of current

i.e Current assets ▪️assets over curr-

C.A means that ▪️-ent liabilities.

assets which easily▪️ It means that

converted into cash▪️ liabilities which

during one year or ▪️ easily payable in

less than one ▪️ one or less than

▪️ year...

▪️

(2) GWC= ▪️ (2) NWC =

Adding all C.A ▪️ C.A-C.L

i.e Bill receivable ▪️ CL = Bill payable

+ A/R,Short term ▪️ A/P,long term

Investment ,etc ▪️ Investment ,etc...

Hope in tabular form u can easily learnt it ...

Answer 2

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Working Capital is the funds which are used in the day to day business operations of a company or to manage their daily running cost.

Working Capital = Current Assets - Current Liabilities

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