Working And Nonoperating Working Capital
Uses of funds comprise all the operating costs incurred but not yet used or sold (i.e., inventories) and all sales that have not yet been paid for (trade receivables). Sources of funds comprise all charges incurred but not yet paid for (trade payables, social security and tax payables), as well as operating revenues from products that have not yet been delivered (advance payments on orders). The net balance of operating uses and sources of funds is called the working capital. If uses of funds exceed sources of funds, the balance is positive and working capital needs to be financed.