What does Working Capital mean?
Working capital is calculated as current assets minus current liabilities. It is a measure of the operating liquidity available to a business. However, companies that do business on a cash basis (such as a grocery store) need very little working capital (it may even be negative such that the business is partly funded by its suppliers).
Stockopedia explains Working Capital...
Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short-term debt and upcoming operational expenses.
However, companies that do business on a cash basis (such as a grocery store) need very little working capital (it may even be negative such that the business is partly funded by its suppliers).
