"In my current role, we measure working capital as gauging the ability of a company to pay off its debts. In a broad sense, working capital is found by subtracting an organization's current liabilities from its current assets. However, this can differ from industry to industry, from retail to the public sector. Yet, I have a firm grasp of each industry's specific needs. In my current role, I use a more focused calculation of adding accounts receivable plus inventory and subtracting accounts payable. A more focused calculation gives a better idea of total working capital when trying to get a better overall picture of their health and efficiency when projecting out towards the future."
