Net working capital

Net working capital is defined as current assets minus current liabilities.

Expanded Definition

Net working capital is a good thing! It means that, in the near term, a company has extra cash to address any untoward events. Its short-term cash account has a positive value, and that capital can be deployed as necessary.

See also working capital

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Related Terms

• Accounts payable
• Accounts receivable
• Benjamin Graham
• Net fixed assets
• Invested capital
• Return on invested capital
• Return on capital

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