Working capital to assets (WC/assets)
Short-term assets less short-term liabilities, as a share of everything the company owns.
It is the first term of the Altman Z-score and a plain read on liquidity cushion.
How it is computed here
(Current assets - current liabilities) / total assets
Measured over the latest complete fiscal year, as filed. Filed under health. Higher is the stronger reading, other things equal.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Negative for retailers and subscription businesses by design, because customers pay before suppliers do.
- Meaningless where no classified balance sheet is presented.
Not meaningful for banks, insurers: the product prints n/m with the reason rather than a number for them.
Questions
How is working capital to assets calculated?
(Current assets - current liabilities) / total assets. Measured over the latest complete fiscal year, as filed.
What does working capital to assets tell a value investor?
It is the first term of the Altman Z-score and a plain read on liquidity cushion.
When does working capital to assets mislead?
Negative for retailers and subscription businesses by design, because customers pay before suppliers do. Meaningless where no classified balance sheet is presented.