Net Working Capital

Net working capital

Current assets minus current liabilities. Often simply referred to as working capital.

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net working capital

See working capital.

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Net Working Capital

Cash and short-term assets expected to be converted to cash within a year less short-term liabilities. Businesses use net working capital to measure cash flow and the ability to service debts. A positive net working capital indicates that the firm has money in order to maintain or expand its operations. Net working capital tends not to add much to the business' assets, but helps keep it running on a day-to-day basis.