The Working Capital Funding Gap Formula is an important concept that helps business owners and financial professionals understand the sources and uses of a company’s working capital. Put simply, the formula measures the difference between total current liabilities and total current assets. This gives us an indication of how much short-term funding the business will need to cover its expenses in the near future. By understanding the formula, business owners can ensure they have enough funds on hand during periods of seasonal demand or economic uncertainty. It’s an essential tool for any savvy entrepreneur!