# Trade working capital

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In business finance, **trade working capital** (TWC)[1][2] is the difference between [current assets](/source/Current_assets) and [current liabilities](/source/Current_liability) related to the everyday operations of a [company](/source/Company). TWC is usually expressed in percentage of sales.

## calculations

A typical way of calculating it is by subtracting accounts payable from the sum of accounts receivable and inventory.[2]

## References

1. Johnson, Rose. ["Trade Working Capital Vs. Total Working Capital"](https://smallbusiness.chron.com/trade-working-capital-vs-total-working-capital-34033.html). *smallbusiness.chron.com*. Retrieved 20 June 2025.

1. ["What Is Trade Working Capital and Its Formula?"](https://www.acquire.fi/glossary/trade-working-capital-definition-calculation-and-example). *acquire.fi*. Retrieved 20 June 2025.

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Adapted from the Wikipedia article [Trade working capital](https://en.wikipedia.org/wiki/Trade_working_capital) by Wikipedia contributors ([contributor history](https://en.wikipedia.org/wiki/Trade_working_capital?action=history)). Available under [Creative Commons Attribution-ShareAlike 4.0 International](https://creativecommons.org/licenses/by-sa/4.0/). Changes may have been made.