Average Working Capital is the total amount of money a business must have in order to cover its short-term operating costs. It includes current assets such as cash, receivables, and inventory, minus any current liabilities such as accounts payable or short-term debt. This figure helps businesses determine how well they’re managing their resources, funds, and operations — and it’s an important financial metric for investors and lenders to evaluate potential investments. So when evaluating a business, take the time to understand Average Working Capital. Because that little number could mean the difference between success… and failure.
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