Article · ~10 min read

Working Capital Formula

Corporate Finance Institute · corporatefinanceinstitute.com Free Beginner

A clear explainer of working capital as current assets minus current liabilities, with a worked example, what positive and negative working capital mean and a free template.

  • Negative working capital is not always bad (some businesses collect before they pay), but it is a warning sign for most.
  • Track it monthly alongside cash, not just at year end.
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The question it answers

  1. What is working capital, and how do I manage it?

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