Definition for : Operating working capital

Operating Working capital is made of: Inventories + Trade receivables - Trade payables. Only the normal amount of operating sources of funds is included in calculations of operating Working capital. Unusually long payment periods granted by suppliers should not be included as a component of normal operating Working capital. Inventories of Raw materials and goods for resale should be included only at their normal amount.

(See Chapter 4 Capital employed and invested capital of the Vernimmen)

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