How Well Are You Managing Your Inventory?

Working capital is an important measure of a company's financial health. It's defined as the difference between Current Assets and Current Liabilities (Working Capital = Current Assets - Current Liabilities). When a company has positive working capital, it is able to pay off its short-term liabilities from assets that can be quickly converted to cash. Inventory is a part of current assets and therefore has a direct impact on working capital levels. Because of its impact on working capital and for many other reasons, ensuring that inventory is managed properly is critical for business success.

Provided by: American Express Topic: Tech Industry Date Added: Nov 2010 Format: HTML

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