A company’s capital is the money it has available to pay for day-to-day operations and to fund future growth. Working capital refers to liquid capital assets that are available for meeting daily obligations.
Working capital is an indicator of a company’s short-term liquidity. It represents its ability to pay its debts, accounts payable, and other obligations that are due within a year.
It is worth noting that working capital is defined by subtracting current assets from current liabilities. A company with more liabilities than assets may run out of working capital quickly.
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