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 Terms Beginning with W

# Working Capital Ratio

Fundamental Analysis Term

Working Capital Ratio is a financial metric used to measure a company's short-term liquidity and ability to pay off its short-term debts. It is calculated by dividing a company's current assets by its current liabilities. The higher the working capital ratio, the better the company's financial position is.

Fundamental analysts use the Working Capital Ratio to assess the health of a company's balance sheet and management's ability to manage its short-term debt obligations. A low working capital ratio can indicate a company is struggling to meet its short-term obligations and may signal underlying financial problems. Conversely, a high working capital ratio can indicate a company has adequate cash flow to manage its short-term liabilities.

The Working Capital Ratio formula is:

Working Capital Ratio = Current Assets / Current Liabilities.

# Working Capital Ratio

Fundamental Analysis Term

Working Capital Ratio is a financial metric used to measure a company's short-term liquidity and ability to pay off its short-term debts. It is calculated by dividing a company's current assets by its current liabilities. The higher the working capital ratio, the better the company's financial position is.

Fundamental analysts use the Working Capital Ratio to assess the health of a company's balance sheet and management's ability to manage its short-term debt obligations. A low working capital ratio can indicate a company is struggling to meet its short-term obligations and may signal underlying financial problems. Conversely, a high working capital ratio can indicate a company has adequate cash flow to manage its short-term liabilities.

The Working Capital Ratio formula is:

Working Capital Ratio = Current Assets / Current Liabilities.

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