Working capital refers to the total amount of assets that a business can use to cover its short-term debt obligations. It’s the difference between the current assets and liabilities on the balance sheet. Increase in working capital means that a company has more liquid assets available to make payments, pay off debts, or invest in new projects and products. In other words, it’s an increase in the amount of money that a business has to fund their day-to-day operations. An increase in working capital is a sign of good financial health and can also provide financial flexibility for businesses as they look to grow and scale up.