Working Capital Definition

Working capital is the difference between a company's current assets and current liabilities, reflecting its short-term financial health.

What is Working Capital?

Positive working capital suggests a company can comfortably meet its short-term obligations.

It is a key measure used by analysts and investors to assess operational liquidity.

A company with $3 million in current assets and $2 million in current liabilities has $1 million in working capital.

A wedge pattern is a chart formation where price consolidates between two converging trend lines, signaling a potential breakout.

A weighted average assigns different levels of importance to individual values based on a specific factor, such as size or volume.

A whipsaw is a rapid price movement in one direction followed quickly by a sharp reversal, often triggering losses for trend-following traders.