Working Capital Management Terms Term Definition Working Capital The difference between a company's current assets and current liabilities. It represents the amount of money a company has available to fund its day-to-day operations. Current Assets Assets that can be converted into cash within one operating cycle. Examples include cash, accounts receivable, inventory, and prepaid expenses. Current Liabilities Short-term obligations that must be paid within one year. Examples include accounts payable, short-term loans, and accrued expenses. Net Working Capital (NWC) The difference between current assets and current liabilities. A positive NWC indicates a company has sufficient funds to meet its short-term obligations. Cash Conversion Cycle (CCC) The time it takes for a company to convert its investments in inventory and accounts receivable into cash. A shorter CCC is generally more desirable. Inventory Turnover Ratio Measures the efficiency of inventory management by calculating t...