Trade Working Capital


DEFINITION of 'Trade Working Capital'

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


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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.

  1. Working Capital

    Working capital is a measure of both a company's efficiency and ...
  2. Current Liabilities

    A company's debts or obligations that are due within one year. ...
  3. Working Capital Loan

    A loan whose purpose is to finance everyday operations of a company. ...
  4. EBITA

    Earnings before interest, taxes and amortization. To calculate ...
  5. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and ...
  6. Gross Profit

    A company's total revenue (equivalent to total sales) minus the ...
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  1. Does working capital include prepaid expenses?

    The calculation for working capital includes any prepaid expenses that are due within one year, since such prepaid expenses ... Read Full Answer >>
  2. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>
  3. Does working capital include short-term debt?

    Short-term debt is considered part of a company's current liabilities and is included in the calculation of working capital. ... Read Full Answer >>
  4. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  5. Do prepayments provide working capital?

    Prepayments, or prepaid expenses, are typically included in the current assets on a company's balance sheet, as they represent ... Read Full Answer >>
  6. Does working capital include inventory?

    A company's working capital includes inventory, and increases in inventory make working capital increase. Working capital ... Read Full Answer >>

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