Working Capital
Definition
The difference between current assets and current liabilities, representing the short-term liquidity available to fund day-to-day operations. Effective working capital management ensures a business can meet its obligations while optimising cash flow for growth investment.
Related Terms
Related FAQ
What special considerations apply to B2B ecommerce and wholesale businesses?
B2B ecommerce differs from B2C: sales cycles are longer, deals are larger, inventory management is critical, and wholesalers expect payment terms and volume discounts.
Read full answer →What is working capital and why does it matter in M&A?
Working capital is current assets minus current liabilities; in M&A, target working capital is often adjusted for — buyer and seller negotiate normalised levels.
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