Gross working capital refers to the total current assets of a company that can be converted into cash within a year or less. It is used to fund daily business activity and is essential for the financial health, operational efficiency, and growth of a company. Gross working capital includes assets such as cash, accounts receivable, inventory, short-term investments, and marketable securities. It is calculated by adding up the value of all current assets. The formula for gross working capital is as follows: Gross Working Capital = Total Value of Current Assets.

Gross working capital is distinct from net working capital, which considers the companys current liabilities and provides a measure of its overall liquidity position. Positive working capital is when current assets are greater than current liabilities, indicating that the company has sufficient funds for operations and growth. Negative working capital is when current liabilities exceed current assets and could indicate financial distress for the company, as it may not be able to pay off its creditors.

While gross working capital provides insight into a companys short-term financial health and liquidity, it is not an indicator of a companys overall financial status. This is because gross working capital consists of only current assets and no liabilities, so it does not offer a complete picture of a firms current financial status.