What is mean by Working Capital?

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Hardy Shah

  • May 31st, 2006
 

The working capital is is segregated to support the the daily and on going bisiness operations, it doesn't include the long term investments intended for capital gain.

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manish kumar gupta

  • Jun 7th, 2006
 

     In the simple way we said  working capital is a capital which owner has

      give the company in the risk of any loss and profit. Which the company

      have work on this capital. 

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kotireddy

  • Jul 22nd, 2006
 

 The funds deployed bya company in the form of cash,investors,account receivable and other current assets.

Formulae:

 net working capital=current assets-current liabilities

leela

  • Aug 2nd, 2006
 

i want to know what treatment is done for interest on working capital loans??is it based on the daily outstanding balance?

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Prakash Shetty

  • Aug 16th, 2006
 

Current assets-Current Liabilities = working capital

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satya

  • Aug 20th, 2006
 

Working Capital is, as one my friends said is Current Assets - Currents liabilities. I think WC is the complete cycle time taken from the start of procurring the Raw Materials to Recovery of Sale proceeds of the items.  This WC cycle enables the Manager-Finance to assess the company Cash Management.  The better the WC cycle the better the prospects for securing Bank Overdrafts.

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Monisha Rajendran

  • Aug 22nd, 2006
 

Working capital is a Reserve fund that every organization maintains, which is used to support the daily and on going business operations. for the profits or losses of the organization.

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Ashwin Kumar B

  • Sep 29th, 2006
 

Working Capital = Current Assest - Current Liabilities

In short It  is Excess of Current Assets minus Current Liabilities which can be utilised as a Working Capital to run the Day today business.

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SONIA AGARWAL

  • Feb 5th, 2007
 

Working capital means difference between current assests and cueernt liabilities. working capital = current assests - current liabilities

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Ramesh

  • Feb 10th, 2007
 

Working capital has got two scenario i.e. net and Gross
Net Working capita is nothing But It is sum of all current asset reduced by current liabilites.
Gross working capital Is nothing but it is sum of all current assets.

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mazhar

  • Feb 27th, 2007
 


    current assets-current liablities is known as Working Capital.

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naveen hp

  • Jul 13th, 2007
 

Working capital also known as short term capital.  In financial terms working captial is equal to current assets minus current liabilities.  It is the short term capital which every company forecasts and procedure funds from various sources for the daily activities of the business, i.e., to meet the current liabilities (expenses to meet within a year)

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vasudeo007

  • Aug 26th, 2008
 

Many people gave very precise and appropriate answer of this question  here.

Let me also try.

In a balance sheet of any company the liabilities are bifurcated into a) capital, b) loans and c) current liabilities while assets are bifurcated into a) fixed, b) investments and c) current.

Now the capital itself is bifurcated into fixed and working capital.

Fixed capital means equity capital + funds available to equity share holders

While working capital means current assets- current liabilities

The concept of working capital is that when current assets - current liabilities is a positive number then it means that profit is represented by some current asset. This is a good situation.

While if the working capital is a negative number that means there might be profit but current assets are falling short of current liabilities. Probably cash was used in buying fixed assets or repaying loans etc. This is not welcome situation.

Presence of working capital means that the company has managed its debotors and creditors very well. And that the company is liquid.

I hope I have answered it well.

Vasudeo.

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