Working capital

Working capital is a critical financial metric for any business, representing the difference between a company's current assets and current liabilities. It reflects the organization's ability to cover its short-term obligations with its short-term assets, such as cash, accounts receivable, and inventory. Adequate working capital ensures that a company can maintain smooth operations, invest in growth opportunities, and manage unexpected expenses. Efficient management of working capital can lead to increased profitability and operational efficiency, making it a fundamental aspect of financial health and stability.