Need A Financial Product Forums Tax Savings What is the meaning of working capital?

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    Ganesh Maral

    What is the meaning of working capital?


    Anita Pawar

    When we subtract current liabilities from current assets, it is referred to as the working capital. By calculating the working capital, the financial user gets to know the amount of cash tied up with the business through various inventory and receivable items and products. Working capital also states the amount of money needed to satisfy short term obligations in the coming 12 months for the company. Keeping track of the working capital is important so as to keep pace with revenue and taxes.

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