Question

Significance of gross working capital and net working capital

Answer 1

Gross working capital is the sum of all of a company's current assets (assets that are convertible to cash within a year or less). ... Gross working capital less current liabilities is equal to net working capital, or simply "working capital," a more useful measure for balance sheet analysis.

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