Working Capital

Overview

Working capital is the difference between a company's current assets and current liabilities, representing the liquidity available for day-to-day operations.

Common Use Cases

• Keeping the business running smoothly.
• Assessing financial health.
• Covering day-to-day expenses.
• Planning liquidity needs.

Examples in Small Businesses

• Calculating working capital to avoid cash shortfalls.
• Financing stock purchases.
• Managing seasonal cash-flow fluctuations.