<Tr> <Td> </Td> <Td> This article needs additional citations for verification . Please help improve this article by adding citations to reliable sources . Unsourced material may be challenged and removed . (May 2014) (Learn how and when to remove this template message) </Td> </Tr> <P> Working capital (abbreviated WC) is a financial metric which represents operating liquidity available to a business, organisation or other entity, including governmental entities . Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital . Gross working capital is equal to current assets . Working capital is calculated as current assets minus current liabilities . If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit . </P> <P> A company can be endowed with assets and profitability but short of liquidity if its assets cannot readily be converted into cash . Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short - term debt and upcoming operational expenses . The management of working capital involves managing inventories, accounts receivable and payable, and cash . </P> <P> Working capital is the difference between the current assets and the current liabilities . </P>

The primary reason that a firm has an investment in working capital is to