The formula of net working capital is NWC = Current Asset – Current Liabilities.
Furthermore, investor use net working capital to indicate the ability of the company that can pay current liabilities promptly or not. If the company didn’t have enough current asset to pay liabilities in due time. It would be dangerous to bankrupt. So, the investors will lose money of investment for short-term creditor of the company. The creditor will claim the asset from the company which is belong to investors too. The result of this is the investors tend not to invest in the company. Nevertheless, if the company have net working capital in positive status, it shows that the company have a success to have current asset available to pay the current liabilities, so it is the reliability of the company and the investors will invest in that company too.