Working capital
Working capital is the excess of current assets (cash, accounts receivable, and inventory) over current liabilities (short term loans and accounts payable). Working capital represents the funds available to pay for the business's current requirements (one-year or less) and a margin of protection for a company's short term creditors. Working capital is essential for a company to meet the continuous operational needs of doing business.
To get a better idea of this concept, try using this Interactive Working Capital Calculator Tool.
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