In simple terms, working capital is cash available for a business to run. Working Capital is essential for any business to pay liabilities and trading operations on a day to day basis. It is the funds that allows a business to function by providing cash to keep operations smooth which is also known as operating liquidity. SME’s can suffer from a lack of working capital, and this is due to long payment terms, Clear Funding are a fantastic solution to this problem. Working Capital can also commonly be known as, Working Capital Finance, Current Ratio and Cash Flow.
We are aware that Working Capital is a crucial measurement to every business as it is an indication to see how companies cope efficiently to cover daily costs and operations. A shortage of working capital could lead to a number of serious glitches and will certainly cause alarm bells to ring – this is due to outgoing expenditure that cannot be met. Whereas positive working capital indicates that a company pays off its liabilities almost immediately.
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