What Is Working Capital and Why Does It Matter?

This post was originally published on On Deck

Working capital is an important part of the financial foundation of your business. It’s crucial for funding day-to-day operations, supporting growth strategies and navigating uncertainties. Ensuring you have enough working capital can help you take advantage of opportunities and navigate the ups and downs of running a business.

What Is Working Capital?

Working capital is a measure of a company’s liquidity. It measures the difference between your current assets and current liabilities. Essentially, it’s what keeps your business running. It helps ensure that you have enough cash on hand to meet immediate business needs such as payroll, utilities and vendor payments.

Why Is Working Capital Important?

Working capital is important because it helps fuel your business’s day-to-day operations — but it’s also important for long-term growth. When you have a sufficient amount of working capital, you can invest in growth strategies, weather seasonal fluctuations and handle any challenges you may face.

Good working capital management is about more than just keeping the lights on. It’s also a signal of financial health and operational efficiency. It’s a good sign to potential lenders or investors that your business is ready to grow.

What Is Working Capital Used For?

Working capital has many

Read the rest of this post, which was originally published on On Deck.

Previous Post

Which States and Metros Have the Most Family-Owned Businesses?

Next Post

The Most Innovative American Companies, Based on Patents