Working Capital

Working Capital is the money a company has available to run its day-to-day operations—basically, current assets (cash, inventory, money owed to it) minus current liabilities (bills due soon, short-term debt). You'll see this on financial statements and hear analysts mention it because it shows whether a company can actually pay its bills and keep the lights on. A healthy working capital means the business isn't stretched too thin. For example, if TechCorp Inc. has $500K in cash and inventory but only $200K in bills coming due this quarter, it's sitting pretty. If those numbers flip, that's a red flag—the company might struggle to survive a rough patch.