Working capital

Operating assets required for operations or capital (terms are not identical! ) Is a term of cost and management accounting and describes what is necessary for operating purposes necessary assets / capital. Both terms are recognized management accounting sizes that have found their way into law.

Calculation

The calculation is made from the asset side of the balance sheet, as it can not be concluded on the necessity of operating the liabilities side of the balance sheet positions. Any capitalized, but non-operational assets are calculate out.

-operating assets

Non- depreciable assets

Depreciable assets ( valuation based on capital employed, for example, on period averages )

Off-balance sheet, fixed assets required for operations (eg internally generated intangible assets )

- -Balance sheet, non -operating assets

-Operating working capital

Operating assets

- Deduction of capital

-operating capital

If the operating assets also the deduction of capital ( the interest-free company that becomes available capital such as trade credit and advances received ) subtracted to obtain the necessary operating capital. Capital employed can not be supplied to the capital market, so it serves as a basis for calculating the imputed interest of a company as a whole or a single investment.

Problem

The subtraction of the capital deduction, however, should be avoided as a rule, as the interest deduction freedom of capital is usually not however given only visually factual.

Therefore, in most cases applies:

Operating capital = capital required for the business