Net Working Capital
/ˌnɛt ˈwɜrkɪŋ ˈkæpɪtl/
Definitions
- (n.) The difference between a company's current assets and current liabilities, representing short-term liquidity and operational efficiency.
The acquisition deal hinged on the target company's net working capital being above a specified threshold.
Forms
- net working capital
- net working capitals
Related terms
See also
Commentary
Net working capital is a critical measure in mergers and acquisitions for assessing a company's short-term financial health and ensuring value protection in purchase agreements.
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