capital, working capital(noun)
assets available for use in the production of further assets
A financial metric that is a measure of current assets of a business that exceeds its liabilities and can be applied to its operation
Working capital is a financial metric which represents operating liquidity available to a business, organization or other entity, including governmental entity. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Net working capital is calculated as current assets minus current liabilities. It is a derivation of working capital, that is commonly used in valuation techniques such as DCFs. If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit. A company can be endowed with assets and profitability but short of liquidity if its assets cannot readily be converted into cash. Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short-term debt and upcoming operational expenses. The management of working capital involves managing inventories, accounts receivable and payable, and cash.
The necessary and vital cash or money for the daily running of a business
Working capital is a vital part of the running of the business.Submitted by MaryC on March 18, 2020
The numerical value of working capital in Chaldean Numerology is: 2
The numerical value of working capital in Pythagorean Numerology is: 6
Examples of working capital in a Sentence
We're hedging our inter-company net exposure on working capital but we didn't hedge enough on these currencies, usually, they haven't been a big factor. But now, they've become a big factor.
Temporary but significant disruptions to supply chains and weaker activity could challenge cash flows and increase demand for short-term credit from households and for working capital from companies.
This is why I recommend that all franchisees have six to nine months of working capital available before buying a franchise.
The trends of eroding profitability and an increasing level of working capital have continued during the first half of the first quarter of 2015, if these trends continue, they will have an adverse impact on the company's profitability and cash flow in 2015.
Creating a detailed budget will force you to make decisions on what’s most important, and what’s not, in spending that money, costs can get out of hand very quickly if you’re not adhering to a budget, which could leave you short on working capital for opportunities (or costly problems) that may arise.
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"working capital." Definitions.net. STANDS4 LLC, 2020. Web. 30 Mar. 2020. <https://www.definitions.net/definition/working+capital>.