Definition

Working capital

Current assets minus current liabilities — the cash tied up in running the business day to day. Its change is a line of the free-cash-flow walk: growth in receivables and inventory absorbs cash; stretching payables releases it.

Formula

Working capital = Current assets − Current liabilities
Cash conversion cycle = DSO + DIO − DPO

Drivers — what actually moves it

Receivables (DSO): days sales outstanding — how fast customers pay.
Inventory (DIO): days inventory outstanding — how long stock sits before selling.
Payables (DPO): days payables outstanding — how long the company takes to pay suppliers.

Where to find it in the filing

Balance sheet + cash flow statement. 10-K Item 8 — current assets/liabilities on the balance sheet; the period's change inside operating activities.

XBRL concepts Echelon grounds to: AssetsCurrent · LiabilitiesCurrent · IncreaseDecreaseInAccountsReceivable

Sector caveats — where this breaks

Negative working capital can be a strength (customers pay before suppliers are due — subscriptions, some retail), not a distress signal by itself.

Drill it in a live lesson Free cash flow walk Current ratio

Educational use only — not investment advice. Figures come from public SEC filings; Echelon teaches you to analyze data, it never recommends buying or selling any security.