Gross Working Capital

Gross Working Capital – Gross Working Capital refers to the total current assets held by a company at a given point in time, including cash, cash equivalents, accounts receivable, inventory, and other short-term assets. It represents the resources available to a business to finance day-to-day operations and meet short-term liabilities. A strong gross working capital indicates that a company can efficiently manage its operational cycle, pay off creditors, and maintain smooth business functioning without liquidity issues. It is a crucial indicator of financial health and operational efficiency.

Example: A company holds ₹10 lakh in cash, ₹5 lakh in accounts receivable, and ₹8 lakh in inventory during FY 2022–23. Its gross working capital totals ₹23 lakh, reflecting the resources available for its daily operations.