Working Capital

Definition: Working Capital is the amount by which current assets exceed current liabilities. It is used to fund the operations of a company or non-profit organization, such as purchases of raw materials, office supplies, salaries, etc.
It can be regarded as the lifeblood of a business, because it is needed to finance the cash conversion cycle of a business: the number of days required to convert raw materials into finished goods, finished goods into sales, and accounts receivables into cash.

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