A bakery has total current assets of $83,200 and total current liabilities of $60,150. What is its net working capital?

1. Net working capital is not really a ratio, but it is often used to measure overall liquidity. 2. It is calculated by subtracting total current liabilities from total current assets. 3. Total current assets are $83,200. 4. Total current liabilities are $60,150. 5. Subtract: $83,200 minus $60,150 equals $23,050. 6. Adding the two gives $143,350, which measures nothing, since assets and claims on them cannot be summed. 7. Comparisons of net working capital over time are what make the figure useful, so one year alone says little. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.7 Analyzing Financial Statements_