Working capital
Accounting working capital is current assets minus current liabilities. Operating working capital usually excludes cash and financing items; a transaction agreement specifies its own inclusions and exclusions.
Also called WC
Working capital at Hanil Widget Works
Using the figures displayed below, current assets of 16.8m less current liabilities of 7.8m give accounting working capital of 9.0m, including 4.2m of cash. Receivables plus inventory less the listed operating liabilities are 7.9 + 4.7 − 7.8 = 4.8m. This calculation describes the displayed lines, not an authenticated transaction peg; the approved case and agreement must establish that basis.
Scroll horizontally to read all columns.
| Assets | Liabilities and equity | ||
|---|---|---|---|
| Cash | 4.20m | Accounts payable | 6.10m |
| Accounts receivable | 7.90m | Accrued expenses | 1.70m |
| Inventory | 4.70m | Total current liabilities | 7.80m |
| Total current assets | 16.80m | Long-term debt | 10.00m |
| Property, plant and equipment | 2.30m | Other non-current liabilities | 0.70m |
| Land | 11.00m | Total liabilities | 18.50m |
| Deposits and other | 2.00m | Owners’ equity | 13.60m |
| Total assets | 32.10m | Total liabilities and equity | 32.10m |
Terms Related to Working capital
Inventory · Accounts receivable · Accounts payable · Revolving credit facility · Quick ratio (acid test) · All of the glossary