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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.

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