- Astha Raut
- 22 Mar 21
- business,Working Capital

Working capital is an essential element in evaluating the business's long-term financial health, irrespective of its size. It is a simple metric where companies can analyse their runway by comparing their current assets against their liabilities. A high working capital translates into sufficient liquidity, operational competence, and raised profits.
The pandemic outbreak has raised arduous challenges, bringing uncertainties, Disrupting the global supply chain, followed by a colossal shift in consumer demands.
Amidst the economic scepticism, optimising working capital usage and having enough liquidity is considered prudent for businesses to ensure that adequate cash levels are available for future opportunities. It brings more flexibility in business operations, expansion, as well as investing in newer products.
CFOs these days consider working capital management in their priority list to ensure smooth operations. Businesses need to focus on various ways to finance their working capital to reduce their risks.