Working Capital is the current assets less the current liabilities. An ideal situation is when a company has a healthy surplus of current assets over current liabilities. When the working capital decreases, it means that the company will have less resources that are readily turned into to cash to cover its liabilities as they fall due. The result can be a liquidity squeeze and can bring the company in an adverse situation. The worst case scenario is when the company has a working capital deficiency or in other words when the current assets are less than the current liabilities.