Gartner Glossary

Working Capital

Working capital is all items on a balance sheet that can be turned into cash quickly to provide liquidity for business operations. Examples include cash on hand, short-term investments, inventory and accounts receivable. Organizations must carefully manage their cash conversion cycle to optimize their working capital and support business operations. The goal of an efficient working capital management strategy is to balance current assets against current liabilities so a company can meet any short-term obligations and maintain operating expenses.

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