What is the Function of Working Capital in Business?

[Suba]

Every business that we run always requires working capital, which is one of the financial metrics that every entrepreneur needs to know. While the meaning of working capital refers to the liquid capital owned by a business. Some examples of working capital are cash, (cash and bank), receivables, inventory of goods, short-term securities, fees/rents to be paid, short-term debts, etc. So in a business, working capital has functions such as:
1. The ability to provide credit/debt to consumers
2. The ability to pay employee salaries, etc.
3. The ability to finance business operations.

 

[King Belieal]

Working capital set aside helps to make sure that there is no break in production because of financial constraints.

 

[Springtime]

The function of working capital is to ensure the smooth running of the company's day-to-day operation.

 

[Trush Jodie]

It is important to have working capital to pay employees. It would make employees to be paid on time even when business revenue is slightly delayed.

 

[Suba]

The function of working capital is to ensure the smooth running of the company's day-to-day operation.

I agree with you, working capital functions to finance the company's daily needs, so that business operations can run smoothly and maintain business liquidity.