GD Accounting Glossary
Glossary › Working Capital

Working Capital

Current assets minus current liabilities — the buffer available to fund day-to-day operations.

Working capital is what remains after covering near-term obligations with near-term resources: current assets (cash, receivables) minus current liabilities (bills, short-term debt).

Positive working capital means breathing room; negative means the business depends on incoming cash arriving exactly on time. Growth consumes working capital, which surprises many first-time founders.

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