Working capital: Difference between revisions
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* [[Liquidity management]] | * [[Liquidity management]] | ||
* [[Over trading]] | * [[Over trading]] | ||
* [[Supply chain finance]] | |||
* [[Working capital management]] | * [[Working capital management]] | ||
Revision as of 09:30, 20 June 2016
Working capital is normally defined as the excess of current assets over current liabilities.
It represents the day to day capital requirement to continue the operations of the organisation.
In simple terms, it can be calculated as:
Stock
ADD Trade debtors
LESS (Trade creditors)
= Working capital
This working capital requirement has to be financed by borrowings, shareholders' funds, or a combination of both of them.
