Working Capital Analysis

Measures a company’s ability to cover its short-term liabilities with its short-term assets.

What it Measures ?

Do we have enough short-term assets to cover short-term debts?

Relevant StakeHolders

Treasury Team, CFO

Why it Matters ?

Monitors working capital efficiency.

In-depth Use Case / Real-world Example

Working Capital Analysis evaluates a company’s short-term financial health by comparing its current assets to current liabilities. If a company has ₹500,000 in current assets and ₹400,000 in liabilities, the working capital is ₹100,000. Positive working capital suggests good liquidity, while negative working capital could indicate potential liquidity problems.

Sample Formula