Small business

Working capital

RETAILBOSS ReferenceUpdated November 2, 2026

Working capital commonly means current assets minus current liabilities, showing the net resources tied to near-term operations.

How it works in retail

Retail current assets can include cash, receivables and inventory, while current liabilities include amounts due to suppliers and other short-term obligations.

A retail example

A retailer has $120,000 in current assets and $80,000 in current liabilities. Its net working capital is $40,000.

What to keep in mind

Working capital is not the same as cash available today. Slow-selling inventory or overdue receivables may be difficult to convert into cash quickly.

Sources & further reading

BDC: Working capital

Examples are illustrative. Terminology and measurement conventions can vary by business and market.

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