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What is Working Capital?

Working Capital
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Tax Professional Answers

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Grant Gilmour B.Sc. MBA CPA CA
Working Capital is the measure of operating liquidity of a company. It is calculated as current assets less current liabilities.

Working Capital reflects the company’s overall financial health. Working Capital includes cash, accounts receivable, inventory and any other current assets less all amounts owing within one year. Therefore, it measures if a company has sufficient assets that can be readily liquidated to pay its short-term debts.
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