How do you calculate working capital?

Working Capital = Current Assets minus Current Liabilities.

Current assets = account receivables + prepaid expenses + inventory + Bank and cash

current liabilities = accounts payable + short term debt

Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining the proper category for the vast array of assets and liabilities on a firms’ balance sheet and deciphering the overall health of a firm in meeting its short-term commitments.

Current Assets

Current assets represent assets that a firm expects to turn into cash within one year, or one business cycle, whichever is less. More obvious categories include cash, cash and cash equivalents, accounts receivables, inventory, and other shorter-term prepaid expenses. Other examples include current assets of discontinued operations and interest payable.

Current Liabilities

In similar fashion, current liabilities are liabilities that a firm expects to pay within a year, or one business cycle, whichever is less. Examples include accounts payables, accrued liabilities, and accrued income taxes. Other current liabilities include dividends payable, capital leases due within a year, and long-term debt that is now due within the year.

If a corporation has extra present day property than modern-day liabilities, then it has operating capital.

Discover your modern assets. Your current assets are some thing you personal that you'll have access to in the subsequent months. ...

Find your present day liabilities. ...

Subtract modern liabilities from cutting-edge assets.

Working capital represents the difference between current assets and current liabilities.

Current asset less current liabilities 

Working capital is Current assets less current liabilities, capacity of the entity to set off its current liabilities with liquid assets

Working Capital is surplus of current assets over current liability i.e. fund available to manage operating cycle.