What is the total working capital?
Total working capital represents the assets of minus its obligations. It helps to determine the character of all capital Liquid, which has society, and is usually used when society seeks to expand operations. This number can be positive if the company has come to work or may be negative if the company has many debts. If the company has a large number of total working capital, it may indicate that the company is mature for growth. Total working capital data can also be called net assets of assets or simply current capital.
In general, the asset is anything that increases the value of the company and may include stocks and bonds, real estate investment and all important capital liquid. Liquid Capital is usually money, but it can be other goods that the company reliably uses in the store. Adversary capital includes real estate, vehicles and any other assets that cannot be traded or sold quickly and easily. In addition to investment, other ASSThe ETS that the company can hold includes its facilities, equipment and business secrets.
Liquid capital is necessary in the operation of the company. It is the money used to pay short -term debts, such as those owed to material suppliers for production. Lack of total working capital can cause the company to delay paying the supplier's debt and entrepreneurship may suffer without sufficient total working capital to pay sellers or negotiations for supplies. In industrial sectors in which materials are in demand, slow payment can hide bad relations with the seller and affect the company's ability to obtain quality materials.
liabilities are often debts, but not always. In companies, the responsibility that affects the overall working capital also includes waiting for law disputes or known losses that society will suffer in the future, such as the consequences of a badCH investment. Since liabilities often come up with the cost of solving, such as interest and debts' reduction is one of the most effective ways to eventually increase working capital. Another way to grow total working capital is to increase profits.
working capital can be a strong indicator of whether the company is ready to expand. If the company does not have a significant amount of total working capital, it will not have money to pay for the costs associated with the expanding trade. Other indications that the company is ready for expansion is a strong team of employees and access to equipment that can handle expansion in the company.