![]() Business executives usually aim for a positive net working capital, where current assets exceed current liabilities.Ĭurrent assets are any assets that a business can sell or consume within one year. It can provide information on the short-term financial health of a company. Net working capital (NWC) is a measure of liquidity. Hence, it is an important concept in finance for valuing companies and accounting for budgeting. The higher the working capital, the higher the investment required. ![]() ![]() It is calculated as the difference between current assets and current liabilities listed on the balance sheet. Net working capital, also called working capital or non-cash working capital, is an accounting metric that measures the amount of capital locked up for the business's operations.
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