Other working capital refers to the financial resources a company has available for its day-to-day operations that are not cash or cash equivalents. It includes accounts receivable, inventory and other current assets, minus accounts payable and other current liabilities.
To get a better understanding of other working capital, it's important to understand working capital which is the difference between a company's current assets and current liabilities. Current assets include cash, accounts receivable, inventory, and other short-term assets. Current liabilities are the company's short-term debts or obligations that are due within a year.
While working capital includes cash, other working capital specifically excludes cash or cash equivalents. It focuses on the company's non-cash current assets and liabilities. It's an important measure of a company's operational efficiency and short-term financial health. A positive other working capital suggests that the company has enough non-cash assets to cover its short-term liabilities, while a negative one implies potential liquidity issues.
However, like other financial metrics, other working capital should not be used in isolation. It should be viewed in conjunction with other financial ratios and metrics to get a comprehensive view of a company's financial health.
For Ford, other working capital is calculated by subtracting the current liabilities (like accounts payable and short-term debt) from the current assets (like accounts receivable and inventory), excluding cash and cash equivalents.
Amazon's other working capital is derived by subtracting the current liabilities (like accounts payable and accrued expenses) from the current assets (like accounts receivable and inventory), excluding cash and cash equivalents.
For Apple, other working capital is calculated by subtracting the current liabilities (like accounts payable and accrued liabilities) from the current assets (like accounts receivable and inventory), excluding cash and cash equivalents.