Gross Working Capital

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DEFINITION of 'Gross Working Capital'

The sum of all of a company's current assets (assets that are convertible to cash within a year or less). Gross working capital includes assets such as cash, checking and savings account balances, accounts receivable, short-term investments, inventory and marketable securities. From gross working capital, subtract the sum of all of a company's current liabilities to get net working capital.

INVESTOPEDIA EXPLAINS 'Gross Working Capital'

A company needs just the right amount of working capital to function optimally. With too much working capital, some current assets would be better put to other uses. With too little working capital, a company may not be able to meet its day-to-day cash requirements. The correct balance is obtained through working capital management.

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