Working capital - SS2 Commerce Past Questions and Answers - page 1

Short-term financial health

By subtracting current liabilities from current assets

Cover short-term expenses and obligations

To avoid disruptions in operations and maintain cash flow

Cash flow problems and difficulty paying bills

Working capital refers to the funds or resources that a company has available to meet its day-to-day operational needs and cover short-term obligations.

Working capital is important for a company's operations because it ensures that the company has enough funds to cover short-term expenses, maintain liquidity, and avoid disruptions in its day-to-day activities.