Working capital can be used to measure the short-term solvency of a company or enterprise. The larger the amount, the more fully prepared the company or enterprise is for the payment obligation, and the better its short-term solvency.

Working capital is also called working capital. It is called working capital abroad. It is the net amount of the total current assets minus the total current liabilities of the joint venture, that is, the net working capital available for use and turnover in the operation of the enterprise.

Since working capital is the net amount of current assets minus current liabilities, changes in current assets and current liabilities will cause changes in working capital.

If current liabilities remain unchanged, the increase of current assets means the increase of working capital; The decrease of current assets means the decrease of working capital. If current assets remain unchanged and current liabilities increase, it means that working capital decreases; A decrease in current liabilities means an increase in working capital.