Working capital is the amount of liquid resources a business uses to run day-to-day operations. It represents the funds available to cover everyday expenses like payroll, inventory purchases, and paying suppliers, after accounting for short-term obligations. In practical terms, it’s current assets (cash, accounts receivable, inventory, etc.) minus current liabilities (short-term debt, accounts payable, etc.). This net pool shows how much liquidity a company has to keep operations moving between cash inflows and outflows. A positive working capital means the business can meet its short-term needs and continue operating smoothly; a negative figure signals potential liquidity problems. For example, if current assets total 500,000 and current liabilities total 420,000, the working capital is 80,000, indicating funds available to support daily activities. Other terms don’t describe this ongoing liquidity concept: a contingency fund is for unexpected events, due diligence is the review process before a deal, and character is unrelated to financial measurements.