Working Capital / Non-current Liabilities
Working Capital / Non-current Liabilities
Working Capital = Current assets - Current Liabilities
Working Capital/Long-Term Liabilities shows the relationship between working capital and non-current liabilities.
Working Capital
Working Capital is the capital the company needs to finance its current operations.
Long-Term Liabilities
Long-Term Liabilities are usually bank loans that run for longer than one year.
Things to keep in mind
- A high value is positive.
- A value of 3 means that the company has three times as much Working Capital as it does non-current Liabilities.
- The key figure shows the company's financial strength, and should not fall below 1.