Working Capital

Working Capital

Working capital refers to the funds that a company uses to finance its day-to-day operations, covering short-term operational needs such as purchasing inventory, paying suppliers, and meeting other short-term liabilities. It is a key metric for assessing a company's operational liquidity and short-term financial health.
A positive working capital indicates that a company has enough assets to cover its short-term liabilities, providing a buffer for day-to-day operational needs. On the other hand, a negative working capital suggests that a company may struggle to meet its short-term obligations.