Current assets minus current liabilities — the cash cushion for daily operations.
Profitable companies die of working-capital starvation when growth ties up cash in inventory and receivables faster than sales collect. Watch the cash conversion cycle, not just profit.
Example: $350k current assets − $210k current liabilities = $140k.
FAQ
What is Working Capital in simple terms?
Profitable companies die of working-capital starvation when growth ties up cash in inventory and receivables faster than sales collect. Watch the cash conversion cycle, not just profit.