Working capital is money available to a company for day-to-day operations. The formula for working capital is: Current Assets – Current Liabilities   How it works/Example: Here is some balance sheet information about XYZ Company: Using…

Working capital analysis is used to determine the liquidity and sufficiency of current assets in comparison to current liabilities. This information is needed to determine whether an organization needs additional long-term funding for its operations,…

The return on working capital ratio compares the earnings for a measurement period to the related amount of working capital. This measure gives the user some idea of whether the amount of working capital currently…