Working capital is a company's liquid assets.

It's the amount of money that a company has readily

available for its day-to-day activities and operations. Here's what you will need to do to calculate
working capital.

HOW TO CALCULATE WC

 1

Begin by determining current assets. Current assets are comprised of cash, marketable
securities, accounts receivable and current inventory. Sum the total value of each of the
above to arrive at the current assets

 2

Determine current liabilities. Current liabilities include accounts payable, accrued

expenses, notes payable and the portion of long-term debt that is classified as current.
Sum all of these accounts to arrive at the current liabilities figure.

 3

Take the total of the current assets and subtract them from the current assets. The
result will be the working capital. In other words, current assets minus current liabilities
equals working capital.

 4

Look at the following example: The company has $100,000 in cash, $50,000 in
securities, $10,000 in account receivable, and $30,000 in inventory. On the current
liabilities side, the company has $60,000 in accounts payable, $10,000 in accrued
expenses, and $20,000 in current debt. The current assets are $100, 000 + $50,000 +
$10,000 + $30,000 or $190,000.The current liabilities are $60,000 + $10,000 + $20,000
or $90,000.Take the current assets of $190,000 and subtract the current liabilities of
$90,000 to arrive at the working capital of $100,000.$190,000 - $90,000 = $100,000.

need of c.a.
When you study the figures of a target company it is worth examining its current assets and
current liabilities.

Current assets represent assets that can be quickly transferred into money. Some of them
are:
  Cash
 Cash equivalents
 Inventories
 Accounts receivable (these are the money that
customers owe to the company for services or
products provided)

Current liabilities represent the short term obligations of the company. Some of them are:

 Accounts payable
 Short term debt

Current assets and current liabilities should be compared over periods of time. It is good if
the current assets have increased significantly over longer periods of time. This means that
the company generates cash. On the other hand, it can be also interpreted as the company
not being able to collect the money it has to take from its accounts receivable. If the current
liabilities of the company are growing at a fast pace, then there might be some problem
with the company. However, this is not always bad since the company may incur higher
liabilities since it needs money to finance some of its goals

Current Assets To Total Debt

Total Current Assets

 Current Assets to Total Debt =

 Short-Term Debt + Long-Term Debt 

Explanation of Current Assets to Total Debt:

The Current Assets to Total Debt ratio measures the company's ability to cover its total debt with its Total
Current Assets.  This ratio is also used to estimate the liquidity of the company by showing the company
can pay its creditors with its current assets if the company's assets ever had to be liquidated.

Importance of Current Assets to Total Debt:

An increasing Current Assets to Total Debt ratio is generally a positive sign, showing the company has a
better ability to satisfy its debt obligations using its Total Current Assets.  A ratio of 1.0 or greater
indicates the company would just meet its debt obligations, when in reality the company would need a
ratio result that is higher than this, as some of the current assets could not easily be converted into cash.