Money is the blood of any organization. Working capital management – defined as current assets minus current liabilities – is a business tool that helps companies effectively make use of current assets and maintain sufficient cash flow to meet short-term goals and obligations. By effectively managing working capital, companies can free up cash that would otherwise be trapped on their balance sheets. As a result, they may be able to reduce the need for external borrowing, expand their businesses, fund mergers or acquisitions, or invest in R&D. Working capital is calculated by subtracting current liabilities from current assets. The essential part of any company is to calculate the total expenditure in all sense as the capital is the main source of any organizational development. That means that the working capital formula can be illustrated as: Working capital = current assets – current liabilities. Please see the engaging presentation for more details.

Aparika Sharma

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