Working capital, also known as net current assets or operational capital, is a crucial financial metric that represents a company's liquidity and its ability to meet its short-term financial obligations. It is an essential aspect of a firm's financial health and is often used to assess its operational efficiency and financial stability. In this article, we will delve deeper into the concept of working capital, its components, and its importance in the financial world. To calculate working capital, we subtract the current liabilities (short-term debts and obligations) from the current assets (resources that can be converted into cash within a year). The formula for working capital is: Working Capital = Current Assets - Current Liabilities Current assets typically include cash, cash equivalents, accounts receivable, inventory, and other short-term investments. Current liabilities consist of accounts payable, short-term loans, accrued expenses, and other obligations due within a y...