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Working Capital Use: How To Calculate & Interpret It [Formula]

ByMANI

The formula of working capital (WC) has two components, current assets, and current liabilities. Both are the numbers of the past. Though it is derived from the past numbers, the working capital use is in the future. This is the reason why it is a vital number in both corporate finance and valuation.  Companies report…

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Working Capital Management: Importance Of Operating Cash Cycle & Liquidity Ratios For Companies

ByMANI

Companies need cash to run their day-to-day operations. Working capital management focuses on factors that generate and consumes cash. A company must be capable of generating more cash than it consumes. Cash parked in the company’s bank account is not working capital. We will dig deeper to get a better understanding of the concept of working capital. What Is…