Your Ask Joey ™ Answer

How to calculate Net Working Capital (NWC)?

Net working capital (NWC) is calculated as current assets less current liabilities, which is derived from a company’s reported balance sheet.

For example, if we had the balance sheet for the great state of Hawaii, we can see that current assets are $100 and current liabilities are $25. To calculate net working capital, we would take current assets of $100 and subtract the current liabilities of $25, which equals net working capital of $75.


Back To All Questions

You might also be interested in...

  • Three Reasons to Become an Accountant

    If you’re someone who is intrigued by numbers, enjoys problem-solving and wants to help others, then accounting might be the perfect career for you. While some people may be put off by its unalluring reputation, accounting is an excellent career choice that has many benefits. In this article, we look at three of the reasons...

  • Qualified Retirement Planning: Tax Advantages & Disadvantages

    Home Advantages and Disadvantages of Tax-Free and Deferred-Tax Retirement Plans What are “qualified retirement plans” and how can they be effective for tax planning? Well, there are plenty of tax savings advantages to individuals contributing to tax-free retirement accounts, as well as tax-deferred retirement accounts. However, this doesn’t necessarily mean that there are no disadvantages...

  • CPA Evolution Survival Guide

    Download Your eBook by selecting the download icon in the top right-hand corner