Working capital, also known as net working capital (NWC), is the difference between a company's current assets and its current liabilities (debt) receivable/unpaid bills from customers, and raw material and finished goods inventories) and current liabilities . It's a standard metric for assessing an organization's short-term health.
The difference between a company's current assets and current liabilities is represented by working capital, often known as net working capital. A large amount of working capital isn't always a good thing. It could signal that the company has too much inventory, is not spending its excess cash, or is not taking advantage of low-cost lending alternatives.
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