BNET Business Dictionary
Business Definition for: Working Capital
- the funds that are readily available to operate a business.
Example: Working capital comprises the total net current assets of a business minus its liabilities.Current assets â€" current liabilitiesCurrent assets are cash and assets that can be converted to cash within one year or a normal operating cycle; current liabilities are monies owed that are due within one year.
If a company's current assets total $300,000 and its current liabilities total $160,000, its working capital is:$300,000 â€" $160,000 = $140,000
Additional Resources
- Assessing Your Working Capital
- Working capital is the money available to fund a company's day-to-day activity. Essentially, it's the cash—plus assets that can quickly be converted to cash—that is readily available and not committed elsewhere. The formula for working capital is total net current assets (inventory, accounts receivable, cash etc)—minus current liabilities (debts, salaries,...
- Articles 2007-05-30
- Measuring Working Capital Productivity
- Working capital productivity compares an organization's sales with its working capital, as a measure of efficiency.If sales increase more rapidly than the funds needed to generate them, it shows that a business is being well managed and operating productively—so it will be more attractive to investors. It's also an indication...
- Articles 2007-03-15
- An Analysis of Working Capital Management Results Across Industries
- By minimizing the amount of funds tied up in current assets, firms are able to reduce financing costs and/or increase the funds available for expansion. By using the CFO Magazine's annual Working Capital Management Survey, one provides insights into the performance of surveyed firms across key components of working capital...
- White papers
- Working Capital: How Is It Working For Your Business?
- Unfortunately, few multiple-unit franchisees or managers fully understand working capital, how important it is for every business, how it is measured, or how to obtain needed working capital. To many business owners and managers, working capital is simply the cash they have on hand to pay their bills. Others understand...
- White papers 2007-12-14
- Understanding Of Working Capital
- Working capital may be regarded as the life blood of business. Working capital is of major importance to internal and external analysis because of its close relationship with the current day-to-day operations of a business. Any change in the working capital will have an effect on a business's cash flows....
- White papers 2008-01-01
- Cash Crop: The 2000 Working Capital Survey
- Is it possible to run a great company without minding the cash flow P's and Q's? Probably not. Money trapped in working capital is money not being used to grow the company, in hotly competitive global marketplace, where product cycles are ever shorter, pricing power is often nonexistent, and technology...
- White papers 2000-08-01
- Working Capital Analysis
- Take stock of your working capital to make sure your business can meet its financial needs. Working capital is one of the most difficult financial concepts to understand for the small-business owner. In fact, the term means a lot of different things to a lot of different people. By definition,...
- White papers 2008-01-01
- Working Capital Advances For Businesses
- Working capital is essential for the running of any company. Merchants often require additional working capital in order to meet unplanned needs. One method of attaining this working capital is to approach a company like Business Credit Card Advance to raise the working capital as a loan. The advantage for...
- White papers 2009-01-01
- Ways To Increase Your Working Capital
- Every business needs some type of working capital. Working capital is defined as the money that is available to any business for their use or the current assets of a business minus the liabilities of the business. The working capital of a business is what is used to pay the...
- White papers 2009-01-01
- Forget The Float? The 2001 Working Capital Survey
- In a tough operating environment, negative working capital isn't always a plus." Working capital efficiency can be a beautiful thing, as any finance executive familiar with the Working Capital as per the survey. The idea, of the survey is if you minimize your working capital — that is, the amount...
- White papers 2001-07-01
- The Importance Of Working Capital
- Many organisations that are profitable on paper are forced to cease trading due to an inability to meet short-term debts when they fall due. In order to remain in business it is essential that an organisation successfully manages its working capital. Too often however, this is an area which is...
- White papers 2000-03-01
- Working Capital Management
- Working capital management involves the relationship between a firm's short-term assets and its short-term liabilities. The goal of working capital management is to ensure that a firm is able to continue its operations and that it has sufficient ability to satisfy both maturing short-term debt and upcoming operational expenses. The...
- White papers 2003-01-01
- Optimising Working Capital: The Latest Solutions for Sustained Financial Performance
- How would you like to achieve profitability comparable to the days of double-digit, top-line revenue growth? The economy may have tipped the scale away from aggressive revenue streams, yet companies must still grow their bottom line and some of them are managing to do just that. Companies must adjust to...
- White papers 2003-01-01
- Working Capital Loans
- Working capital loans are short-term loans meant to increase a small business' working capital which can then be used to fund daily operation or growth initiatives. Though this product sounds good, the truth is that most working capital loans are extremely hard to obtain. The banks and lending institutions that...
- White papers 2008-01-01
- Working Capital: The Life Blood Of Business
- A working capital advance helps the business to continue its operations. The advanced sum can be repaid through future credit card receivables. Since the money is repaid through future credit card receivables, there is no fixed repayment schedule. Availing a working capital advance is easier as no personal guarantee and...
- White papers 2009-01-01
- Working Capital Loan - Money Power To Propel Your Business!
- Getting working capital financing for your business has its share of woes and worries. Most often, people tend to confuse a working capital loan with a business cash advance. However, there are important differences between the two. To start with, business cash advance is usually easier to secure than a...
- White papers 2009-01-01
- Factors Influencing Working Capital Management
- The working capital needs of a firm are influenced by numerous factors. The important ones are: nature of business; seasonality of operations; production conditions; market conditions; conditions of supply. The working capital requirement of a firm is closely related to the nature of its business. A service firm, like an...
- White papers 2008-07-22
- Working Capital Management - Working Capital Loan Options
- Short-term working capital management options are not always adequately considered by business owners due to a preference for long-term commercial financing. This paper explains some important short-term working capital loan strategies that are usually more effective than long-term business financing in producing cost-effective working capital management results for business owners.
- White papers 2007-04-13
- Working Out Working Capital
- With all the focus on items like dividend yields, PE ratios and other shorthand ways of assessing the value of company, what's happening to a company's working capital position is sometimes forgotten. But working capital is often where the stresses and strains on a company show up first. So it's...
- White papers 2008-03-17
- 5 Myths About Improving Working Capital Performance
- Improving working capital performance enhances a company's competitiveness by increasing its Return On Invested Capital ROIC. However, generating cash through working capital improvement is often easier said than done. The path to working capital improvement is beset with a number of myths. They are not labeled as such but generally...
- White papers 2005-10-01
