Measuring working capital involves assessing a company’s short-term assets and liabilities in order to gauge its financial health. This includes accounts receivables, cash, inventory and accounts payables. Working capital is the lifeblood of any business because it measures how efficiently a company is converting its resources into profits. A healthy working capital ratio indicates that a firm has adequate liquidity to manage its current obligations and ensure future growth. Put simply, measuring working capital is an essential part of managing money; and it all starts with having a clear understanding of your finances.