Working Capital: Importance, Formula, Components

Working capital is the lifeblood of any business, providing the necessary funds to keep operations running smoothly. It represents the difference between a company’s current assets and current liabilities, indicating how much cash is available for daily business operations. Ask any businessman, and they will tell you the importance of working capital, which is like oxygen for a business and helps maintain solvency. Without adequate working capital, a company may struggle to pay its bills, meet payroll obligations, or take advantage of growth opportunities. Thus, managing working capital effectively is crucial to ensure the long-term success and sustainability of any business.

You May Interested More: