Is Net Working Capital a Current Asset?

Written by True Tamplin, BSc, CEPF®

Updated on January 02, 2023

No, net working capital is not a current asset. A current asset is any asset that will provide an economic value for or within one year. Net working capital refers to the difference between a company’s total current assets minus its total current liabilities. Therefore, net working capital is not itself a current asset, but a representation of the value of the difference.

Is Net Working Capital a Current Asset FAQs

Is net working capital a current asset?

No, net working capital is not a current asset.

What is a current asset?

A current asset is any asset that will provide an economic value for or within one year.

What is net working capital?

Net working capital refers to the difference between a company’s total current assets minus its total current liabilities.

Why wouldn't net working capital be a current asset?

Net working capital refers to the difference between a company’s total current assets minus its total current liabilities. Therefore, net working capital is not itself a current asset, but a representation of the value of the difference.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.