Working Capital refers to the quantum of liquid assets available to a business entity through the netting of its current assets and current liabilities. It is computed as: Working Capital = Current Assets – Current Liabilities The main components of Current Assets are cash and cash equivalents, accounts receivable (from trade creditors) and inventory. The main components of Current Liabilities are the account payable (amount due to debtors) and the current portion of debt. When cash and cash equivalents are excluded in the netting process, the net so determined is referred to as Trade Working Capital.