Net working capital

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

• A measure of liquidity calculated as the difference between the firm's current assets and its current liabilities, or, alternatively, the portion of current assets financed with long-term funds; can be positive or negative.

• Net Working Capital refers to the net non-interest bearing short term assets: Hence, net working capital equals cash plus inventories plus accounts receivables minus accounts payables.


Follow this link for all the terms related to capitalnet.

 Embedded terms in definition
 Accounts payable
Accounts receivable
Current assets
Current liabilities
Working capital
 Related Terms
Annualized net present value anpv approach
Average cost of capital
Capital account
Capital adequacy
Capital allocation decision
Capital appreciation
Capital asset
Capital asset pricing model
Capital budget
Capital budgeting
Capital cost allowance
Capital expenditure
Capital flight
Capital gain
Capital gains yield
Capital impairment rule
Capital lease
Capital loss
Capital market
Capital market efficiency
Capital market imperfections view
Capital market line
Capital rationing
Capital stock
Capital structure
Capital surplus
Change in net working capital
Complete capital market
Cost of capital
Cost of limited partner capital
Debt capital
Debt to capital ratio
Dedicated capital
Efficient capital market
Equity capital
Exchange rate risk capital budgeting
Financial or capital lease
Firm's net value of debt
Gigo garbage in, garbage out in capital budgeting
Hard capital rationing
Human capital
Invested capital
Issued share capital
Legal capital
Marginal cost of capital
Marginal cost of capital schedule
Net adjusted present value
Net advantage of refunding
Net advantage to leasing
Net advantage to merging
Net asset value
Net assets
Net benefit to leverage factor
Net book value
Net cash balance
Net cash flow
Net change
Net coupon
Net domestic product
Net earnings
Net errors and omissions
Net financing cost
Net float
Net income
Net income before taxes
Net interest margin
Net investment
Net lease
Net operating losses
Net operating margin
Net period
Net position
Net present value
Net present value approach
Net present value of future investments
Net present value of growth opportunities
Net present value profiles
Net present value rule
Net proceeds
Net profit
Net profit margin
Net profits rule
Net sales
Net salvage value
Net working capital recapture
Net worth
Nondiversifiability of human capital
Opportunity cost of capital
Optimal capital structure
Other capital
Outstanding share capital
Pecking order view of capital structure
Perfect capital market
Perfect market view of capital structure
Personal tax view of capital structure
Pie model of capital structure
Planned capital expenditure program
Pro forma capital structure analysis
Real capital
Real options capital budgeting
Regulatory capital
Risk capital budgeting
Safety net return
Soft capital rationing
Sophisticated approaches to capital budgeting
Static theory of capital structure
Target capital structure
Taxable capital gain
Total capital
Uniform net capital rule
Venture capital
Weighted average cost of capital
Working capital
Working capital management
Working capital ratio

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