what is working capital

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:30AM in AAT student discussion
i have looked through my books and cannot find it anywhere<BR><BR>can anyone help and explain what it is?

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    what is working capital

    Working capital is the money required to run the day to day business activities. <BR>It is Current assets - current liabilities<BR><BR>If a company's current assets do not exceed its current liabilities, then it may run into trouble paying back creditors that want their money quickly. The working capital ratio, which measures this ability to pay back creditors, is calculated as current assets divided by current liabilities. <BR><BR>When u get stuck and nothing seems to help use google. <BR><BR>I hope the explanation helps, if u have any doubts post a msg again, i will be around<BR>

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