Accounting Dictionary - Letter W
(also called net working capital) is current assets less current liabilities. Working capital is a measure of an entity's liquidity. Working capital is not affected by transactions involving only current accounts or noncurrent accounts. Sources of working capital include: net income, increase in noncurrent liabilities (e.g., acquisition of long-term debt), decrease in noncurrent assets (e.g., sale of fixed assets), and increase in stockholders' equity.
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