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Working capital

The money a business needs to fund its day to day operations, measured as current assets minus current liabilities.

Working capital is what is left when you subtract current liabilities from current assets. It shows whether a business has enough short term resources to cover its short term obligations.

Managing it means balancing inventory, receivables and payables so cash is not tied up unnecessarily. It is a core concern for corporate treasury and a common health check for any company.

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