What is defined as the capital of a business used in its day-to-day trading operations?

Working capital is defined as the capital of a business used in its day-to-day trading operations. It represents the difference between a company's current assets and current liabilities, providing a measure of a company's short-term financial health and operational efficiency. By maintaining adequate working capital, a business can cover its operational costs, invest in inventory, pay suppliers, and meet other short-term financial obligations. This is crucial for sustaining smooth operations and facilitating growth.

In contrast, gross capital generally refers to the total amount of capital invested in the business without accounting for depreciation. Fixed capital represents long-term assets like property or machinery that are not expected to be converted into cash in the short run. Intangible capital includes non-physical assets like patents and trademarks, which are important for a business but are not directly linked to day-to-day trading operations. Therefore, working capital is the most accurate term describing the funds utilized for the essential functions of operating a business on a daily basis.