Working Capital

Working capital is the money a company has available right now to pay its bills and keep operations running. It's calculated by subtracting what the company owes (like debt and unpaid invoices to suppliers) from what it owns and can quickly convert to cash (like inventory and money owed by customers). You'll see this number on financial statements, and it matters because a company with healthy working capital can weather tough times and grab opportunities without scrambling for cash. Think of it like your personal checking account—if you have $5,000 in the bank but owe $4,800 in bills next week, your working capital is only $200, which is tight. A company in the same boat might struggle to invest in growth or handle unexpected problems.