working capital

USAGE SUMMARY

"working capital" is a correct and usable part of a sentence in written English.
You can use it to refer to money that is available for use in a business to pay its daily expenses. For example: "The company was able to increase its working capital by taking out a loan."

✓ Grammatically correct

Formal & Business

News & Media

Science

Human-verified examples from authoritative sources

Exact Expressions

60 human-written examples

The annualized working capital is the product of working capital investment and interest rate.

Biotechnology for Biofuels

Enough working capital to survive in the working-capital-intensive retail channel.

Bplans

The annualised working capital is the product of the working capital investment and the interest rate.

Biotechnology for Biofuels

More broadly, working capital encompasses both a firm's current assets and liabilities, and working-capital management is concerned with the management of current assets and liabilities.

Forbes

The other proceeds went for working capital.

The New York Times - Sports

Huntington Hartford provided the working capital & the name Speed-Park.

The New Yorker

Control your working capital Cashflow is more than just profitability.

Independent

The supply chain was overhauled and working capital reduced.

The Economist

And the farms need working capital to restock.

The Economist

It had problems with working capital and stock before Christmas".

Independent

Wal-Mart has a working capital deficit, too.

The New York Times

Expert writing Tips

Best practice

When discussing a company's financial health, use "working capital" to specifically refer to the difference between its current assets and current liabilities.

Common error

Avoid using "working capital" interchangeably with total capital. "Working capital" refers specifically to the difference between current assets and liabilities, whereas total capital represents all the funds used to finance a company's assets.

Linguistic Context

The phrase "working capital" functions as a noun phrase, typically serving as the subject or object of a sentence. Ludwig AI confirms its proper usage in various contexts. For instance, it can represent a company's financial resources or an element in cost calculation.

Expression frequency: Very common

Frequent in

News & Media

33%

Science

33%

Formal & Business

17%

Less common in

Wiki

8%

Encyclopedias

3%

Social Media

0%

Ludwig's WRAP-UP

In summary, "working capital" is a crucial financial metric representing the difference between a company's current assets and liabilities. Ludwig AI confirms its correct grammatical standing and widespread use across diverse sources. Its professional register reflects its importance in business, finance, and economics. While alternatives like "operating capital" exist, understanding the precise meaning of "working capital" is essential for analyzing a company's financial health and operational efficiency.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

net working capital

Specifies that it's the difference between current assets and current liabilities.

operating capital

Focuses on the capital used for day-to-day operations.

circulating capital

Emphasizes the cyclical nature of this capital as it moves through the business.

liquid assets

Highlights the ease with which these assets can be converted to cash.

current assets less current liabilities

Defines "working capital" by its components, providing a more descriptive alternative.

short-term capital

Focuses on the short-term availability and use of the capital.

available funds

Highlights the accessibility and usability of the capital.

ready cash

Emphasizes the immediate availability of cash for operational needs.

day-to-day funds

Specifically relates to the capital used for daily expenses and operations.

business liquidity

Focuses on the overall liquidity position of the business, which is related to "working capital".

FAQs

How is "working capital" calculated?

The formula for calculating "working capital" is: Current Assets - Current Liabilities. This provides a measure of a company's short-term financial health and operational efficiency.

What does a negative "working capital" indicate?

A negative "working capital" means a company's current liabilities exceed its current assets, potentially indicating difficulties in meeting short-term obligations. However, it's not always a sign of distress and can be common in certain industries like retail, as noted in examples from "The New York Times".

What are some alternatives to "working capital"?

Depending on the context, you can use terms like "operating capital", "circulating capital", or "net working capital" as alternatives to "working capital".

Why is "working capital" important for businesses?

"Working capital" is crucial because it reflects a company's ability to fund its day-to-day operations, pay short-term debts, and invest in growth opportunities. Efficient management of "working capital" is essential for maintaining financial stability and operational efficiency.