In order to carry on the business, the company has to plan for future needs and also meet its day-to-day expenses, such as payrolls or paying for raw materials, tools, and supplies. To meet these expenses the company requires cash.

Therefore, the funds that are required by a company to meet its short-term expenses (within 1 year) are known as ‘Working Capital’.

Working Capital meaning is the cash required to meet the company’s short-term expenses.

Let's discuss Working Capital Meaning – Ratio, Example, Formula & Cycle.

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