**Working capital**, also known as

**net working capital**(

**NWC**), is the difference between a company’s current assets, such as cash, accounts receivable (customers’ unpaid bills) and inventories of

Working capital = current assets – current liabilities The working capital formula tells us the short-term, liquid assets remaining after short-term liabilities have been paid off. It is a measure of a company’s short-term liquidity and important for performing financial analysis, financial modeling,

Step 4 – Calculate Changes in **Net Working Capital** using the formula below – Changes in **Net Working Capital** Formula = **Working Capital** (Current Year) – **Working Capital** (Previous Year). Change in **Net Working Capital** Calculation (Colgate) Below is the Snapshot of Colgate’s 2016 and 2015 balance sheet.

C. **Net working capital** increases when inventory is sold for cash at a profit. D. Firms with equal amounts of **net working capital** are also equally liquid. E. **Net working capital** is a part of the operating cash flow.

Net Working Capital. Net working capital is a more accurate and complete measure of the liquidity health of a business. It is calculated by adding up the firms current assets – cash, short-term investments, accounts receivable and inventory – and subtracting all of its current liabilities.

Net Working Capital Calculator. This net working capital calculator estimates the net working capital value/ratio by considering the short term liabilities and the current assets of a company in order to assess its short-term liquidity. There is in depth information about the formulas used below the tool. Cash & …

Net working capital is different from operating working capital. Net working capital focuses more on the now, rather than the long term. The formula for calculating net working capital is: NWC = total assets - total liabilities. Unlike operating working capital, you do not need to remove cash, securities or non-interest liabilities.

Net Working Capital (**NWC**) is the difference between a companys current assets (net of cash) and current liabilities (net of debt) on its balance sheet. It is a measure of a company’s liquidity and its ability to meet short-term obligations as well as fund operations of the business.