# Gross Working Capital

## Gross Working Capital Explanation

Gross working capital refers to a company's total current assets within a fiscal year. This includes cash, inventory, accounts receivable, and other short-term assets. It's a measure of a company's short-term financial health and operational efficiency.

The Gross Working Capital formula is simply:

Gross Working Capital = Current Assets

However, it's important to note that gross working capital doesn't account for current liabilities, and may not accurately reflect a company's financial status. Therefore, it's advised to also assess the firm's Net Working Capital.

## Calculating Gross Working Capital

To calculate gross working capital, sum all current assets held within a 12-month period. This includes:

Gross working capital = current investments + cash + accounts receivable + short-term assets + inventory + commercial papers + other current assets

Also, consider the company's current liabilities for a more thorough financial analysis.

Gross Working Capital Example

Let's look at an example:

Cash = Rs. 55,000

Accounts receivable = Rs. 10,000

Current investments = Rs. 80,000

Commercial papers = Rs. 25,000

Other current assets = Rs. 5,000

Gross working capital = Rs. 55,000 + Rs. 10,000 + Rs. 80,000 + Rs. 25,000 + Rs. 5,000

Gross working capital = Rs. 1,75,000