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. How can working capital affect a company's finances?

    Understand how working capital may affect a company's financial strength and investment effectiveness, as it changes from ... Read Answer >>
  3. Why is working capital management important to a company?

    Learn about a company's working capital; good working capital management is essential to maintaining a company's liquidity ... Read Answer >>
  4. 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 >>
  5. Can working capital be negative?

    Learn under what circumstances negative working capital can arise and what it means when working capital stays negative for ... Read Answer >>
  6. 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 >>
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