Working Capital

Definition:

A measure of both a company’s efficiency and its short-term financial health calculated as current assets minus current liabilities. If current assets are less than current liabilities, a company has a Working Capital deficiency or deficit. Also known as Net Working Capital.

A company can have assets and profitability but be short of Liquidity if its assets cannot readily be converted into cash. To assist with cash flow challenges, a company may put in place a Working Capital Facility.

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