The difference between a company's current assets and current liabilities, representing the short-term financial health and operational efficiency. It shows how much liquid capital a company has available for day-to-day operations.
From Old English 'weorc' (work) and Latin 'capitalis' (relating to the head/chief). The term emerged in early 20th century accounting to distinguish operational funds from long-term capital investments.
Negative working capital isn't always bad - companies like Amazon and Walmart actually benefit from it because they collect cash from customers before paying suppliers. It's like getting an interest-free loan from your business model!
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