Change In Working Capital

View All Terms
Working Capital is a measure of a company's short term liquidity or its ability to cover short term liabilities. It is defined as the difference between a company's current assets and current liabilities. Working Capital is calculated as Working Capital = {Total Current Assets} - {Total Current Liabilities} Changes in Working Capital is reported in the cash flow statement since it is one of the major ways in which net income can differ from operating cash flow.