Working capital investment formula is a metric that helps businesses measure their current financial health and operational sustainability. It measures the liquid assets held by a business in relation to its short-term liabilities, providing an indication of how well positioned a business is to meet its short-term obligations. By effectively managing their working capital ratio, businesses can ensure they have enough resources at hand to maintain operations during difficult times – eliminating the need to take out costly loans or dip into cash reserves. Put simply, the lower the ratio, the better positioned a business is to handle exigencies that come its way.