Define: Working Capital

UK Accounting Glossary

Definition: Working Capital

Quick Summary

Finance provided to support the short-term assets of the business (stocks and debtors) to the extent that these are not financed by short-term creditors. It is calculated as current assets minus current liabilities.

What is the dictionary definition of Working Capital?

Dictionary Definition

Working capital is the capital used to finance the day-to-day operations of a company.

It’s included in the balance sheet and is calculated as the difference between current assets and current liabilities.

Working Capital = Current Assets – Current Liabilities

Full Definition

The excess of current assets less current liabilities. The figure represents the amount of resources the business has in a form that is readily convertible into cash. Same as net current assets.

Working Capital FAQ's