WORKING CAPITAL: The capital required for the company to run its day to day operations of an organization, where the currents assets are deducted from the current liabilities.

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Working capital is a measure of a company’s liquidity, operational, efficiency, and its short-term financial health. If a company has substantial working capital, then it should have the potential to invest and grow. If a company’s current assets do not exceed its current liabilities, then it may have trouble growing or paying back creditors, or even go bankrupt.