Definition

Current assets - Current liabilities

Calculation rule

Working capital	= Accounts payable
	+ Advanced & Prepaid liabilities
	- Debtors
	- Inventories

Comment

If Current liabilities are in excess of Current assets, the company has available cash to meet short-term obligations. If not, the company shows a need in working capital.

One might prefer to use a strict definition of Working capital, also called Operating working capital = [Accounts receivable + Inventories] – Accounts payable

As with most measures of corporate well-being, this varies by industry and even by season.

Reference

   Accounts payable
   Accounts receivable
   Current assets
   Current liabilities
   Debtors
   Operating working capital
   Sales to Working capital