What is the difference between current assets and current liabilities?

Explanation

The difference between current asset and current liability is known as working capital which represents operating liquidity available to business. Working capital is the capital of a business which is used in its day-to-day trading operations, calculated as the current assets - the current liabilities.

Working capital, also known as net working capital, is the difference between a company's current assets, like cash, accounts receivable (customers' unpaid bills) and inventories of raw materials and finished goods, and its current liabilities, like accounts payable.