New Metric Reveals Business Liquidity, Ensuring Smooth Operations and Debt Repayment
Working capital is a financial measure that shows how much money a business has available for day-to-day operations. It is calculated by subtracting current liabilities from current assets. If a company has more current assets than liabilities, it has positive working capital, which is important for paying debts and expenses. Managing working capital involves handling inventory, accounts receivable, accounts payable, and cash to ensure the business can keep running smoothly.