Net Working Capital Explained — A Must-Know for IB Interviews

Net working capital is one of the most important concepts in finance to grasp, yet it's often taught wrong by professors in top colleges around the world. If you're like me, you learned that net working capital = current assets - current liabilities. This is actually WRONG. Net working capital is actually: OPERATING current assets - OPERATING current liabilities. But what does "operating" actually mean? Watch this video to learn more about how net working capital works with a simple, easy-to-understand example. This topic is one of the most commonly asked accounting questions in investment banking interviews, and is frequently answered correctly. About Finance Interview Coach: Finance Interview Coach is the top coaching company in finance, covering sectors like IB, PE, venture capital, hedge funds, equity research, and other areas of finance. We have a 93% placement rate. To learn more, visit our site at www.financeinterviewcoach.com/