Working Capital: How Is It Working For Your Business?

Unfortunately, few multiple-unit franchisees or managers fully understand working capital, how important it is for every business, how it is measured, or how to obtain needed working capital. To many business owners and managers, working capital is simply the cash they have on hand to pay their bills. Others understand that working capital is more than just cash - that it includes accounts receivable, inventory, and other current assets of their operation. By definition, working capital is simply the amount by which the business operation's current assets exceed its current liabilities. Too little working capital means the business will soon be unable to pay its bills.