This is one of the basic accounts questions for interview. You can simply state its definition or give an example to further elaborate. Working capital is calculated as current assets minus current liabilities, which is used in day-to-day trading. In a simple accounting scheme, the concept of working capital focuses on the capital resources that a given company can count on in the short term to operate. These resources owned by the company are the cash, the portfolio of financial products, and other investments made by the company.
Further, highlight your answer with your experience (if any).
You can furnish your answer for this accounting-related interview question like this:
"In my previous role, I monitored working capital so that optimal cash flow management was properly done. This helped me identify opportunities to reduce inventory holding costs. Efficiency-wise that helped."
