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what is working capital in what way it is useful for
company or orgainzation
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Answer Posted / madhulika
A measure of both a company's efficiency and its short-term financial health. The working capital ratio is calculated as:
WORKING CAPITAL= CURRENT ASSETS-CURRENT LIABILITIES
Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, accounts receivable and inventory).
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