Working capital

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Working capital

  • WORKING CAPITAL = CURRENT ASSETS - CURRENT LIABILITIES
  • The relatively liquid assets of a business that can easily be turned into cash - money owed by a business which needs to be paid in the short-term.
  • Working capital is the funds left over to meet day-to-day expenses after current debts have been paid. It is calculated by current assets minus current liabilities.
  • Working capital cycle is the flow of liquid resources into and out of a business
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