Answer:
Working capital is essential to a company's fundamental health and operational success. It helps in maintaining a solid balance between growth, profitability and liquidity.
Net working capital is the difference between a business/ company's current assets and current liabilities or debts.
Current assets are cash, accounts receivable and inventories of raw materials and finished goods
Current liabilities are accounts payable.
Explanation:
Working capital helps to maintain smooth operations and help improve a company's earnings and profitability and it includes:
1. Inventory management
2. Management of accounts receivable and account payable.
