A financial term known as working capital (WC) measures the operating liquidity that is accessible to a company, organization, or other body, including governmental agencies.
Working capital is seen as a component of operational capital, along with fixed assets like plant and equipment. Current assets are equal to gross working capital. Current assets less Current Liabilities equals Working Capital. [1] An entity has a working capital deficiency, also known as a working capital deficit and negative working capital, if current assets are fewer than current liabilities. Despite having assets and profits, a business may lack liquidity if its assets cannot be quickly transformed into cash. A company must have positive working capital to ensure that it can continue to operate
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