Working Capital (Noun)
Meaning
Assets available for use in the production of further assets.
Classification
Nouns denoting possession and transfer of possession.
Examples
- A company's working capital includes its inventory, accounts receivable, and cash, which are all used to generate revenue and produce additional assets.
- Effective management of working capital is critical for businesses to ensure they have sufficient resources to invest in growth initiatives.
- A company's working capital is typically financed through a combination of equity and short-term debt, such as loans and credit lines.
- Working capital is a key component of a company's balance sheet, as it represents the assets that are readily available for use in the production of further assets.
- A strong working capital position allows a company to take advantage of new business opportunities and respond quickly to changes in the market.