Operating Capital is the money needed for a business to operate and pay for daily expenses. This includes operational expenses—such as employee salaries, rent, utilities, and inventory purchases—as well as non-operational costs like taxes, debt payments, and investment capital. Operating Capital helps to ensure that a business can stay afloat in the short-term, while investing income into long-term projects and financial goals. Having enough Operating Capital is essential to keeping a business running smoothly, so it’s important to track it carefully and make smart investments when necessary.