Gross Working Capital

What is 'Gross Working Capital'

Gross working capital is 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.

BREAKING DOWN '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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RELATED FAQS
  1. What can working capital be used for?

    Find out what working capital is used for, including how to calculate this financial metric by subtracting current liabilities ... Read Answer >>
  2. What does high working capital say about a company's financial prospects?

    Learn about net working capital and what a high figure indicates about a company's financial prospects, including the importance ... Read Answer >>
  3. Does working capital include stock?

    Discover what a company's working capital is and what it includes, how it is used, and what positive and negative figures ... Read Answer >>
  4. What does a low working capital ratio show about a company's working capital management?

    Find out the significance of working capital management for a company and look at the working capital ratio analysts use ... Read Answer >>
  5. Does working capital measure liquidity?

    Learn about working capital and liquidity, and how working capital measures the liquidity, efficiency and overall health ... Read Answer >>
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