Trade Working Capital

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DEFINITION of 'Trade Working Capital'

The difference between current assets and current liabilities directly associated with everyday business operations.

BREAKING DOWN 'Trade Working Capital'

This measure is relevant in analyzing the near-term financial health of a company, as only current assets and current liabilities used for everyday business are considered.

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RELATED FAQS
  1. How do you calculate net current assets in Excel?

    Learn how to calculate net current assets, or working capital, in Microsoft Excel and how to evaluate the financial health ... Read Answer >>
  2. What is the formula for calculating the current ratio?

    Find out how to calculate the current ratio and what that result can tell you about a potential investment. Read Answer >>
  3. 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 >>
  4. What kinds of liabilities appear on the balance sheet?

    Learn what current and non-current liabilities are, the difference between the two, and examples of liabilities that a company ... Read Answer >>
  5. What are the main differences between the current ratio and the quick ratio?

    Find out how the quick ratio and the current ratio can offer different views on a company's ability to pay off liabilities. Read Answer >>
  6. What does the operating cash flow ratio measure?

    Learn about the operating cash flow ratio, how the ratio is calculated and what it indicates about a company. Read Answer >>
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