Working Capital
Interactive

Working Capital

Intuition Publishing Pty Ltd
Updated Sep 24, 2020

Adequate working capital is vital for the short-term liquidity of a firm. Sales growth will increase the need for working capital. However, if the company has too much money tied up in working capital, this will have a negative effect on cash flow. Here we focus on the working capital requirements of a company and how these requirements change as sales revenues grow.

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