WORKING CAPITAL Definition

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WORKING CAPITAL (WC) is current assets minus current liabilities; also called net current assets or current capital. It measures the margin of protection for current creditors. It reflects the ability to finance current operations.

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EXISTENCE, in accounting, deals with whether assets or liabilities exist at a given date. For example, management asserts that finished goods inventories in the balance sheet are available for sale.

COST SYNERGY is the savings in operating costs expected after two companies, who compliment each others strengths, join.

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