Working capital equals assets minus liabilities current assets divided by current liabilities current assets minus current liabilities current liabilities divided by current assets current liabilities minus current assets assets divided by liabilities

Current assets minus current liabilities

Explanation:

The working capital is a difference between the current assets and the current liabilities.

In mathematically,

Working capital = Current assets - current liabilities

where,

Current assets = Cash + account receivable + prepaid insurance + stock

Current liabilities = short term note payable + account payable

The change in the working capital shows in the operating section of the cash flow statement

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