Alarge amount of a typical financial manager's time is spent on working capital management. working capital policy involves two basic questions: (1) what is the optimal amount of each type of current asset for the firm to carry and (2) how should current asset holdings be financed? it's important to understand working capital terminology and the basic definitions. working capital is simply . is defined as current assets minus current liabilities. net operating working capital (nowc) is defined as current assets minus the difference between current liabilities and notes payable. nowc represents working capital used for purposes.