Every Company Has Working Capital at First

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Working capital: what is it and what management tasks does it solve Columns April 10, 2024 Maxim Oganov Maxim Oganov Lecturer at Avito Business School, founder of Oganov.digital and Avitolog.expert Every norway telegram number database company has working capital. At first glance, it seems obvious that a positive working capital indicator is good for business, and a negative one is bad.

But things are not so clear-cut: many companies successfully operate with a negative balance, while others experience stagnation even with high indicators. Business consultant and author of the Oganov.Consulting project Maxim Oganov explains why this happens. Subscribe to RB.RU in Telegram Content: What is working capital Working capital structure Types of working capital How to calculate working capital What are the risks for a business with a shortage and excess of working capital? How to Manage Working Capital Effectively Example of calculating turnover ratios What to do when the capital is very large What to do when equity is negative Select a current account at Alfa-Bank - opening and servicing an account for free What is working capital Working capital is the sum of the funds that a company uses to carry out one operating cycle.

For example, a bakery's operating cycle is one day. In the morning, raw materials are purchased and baked goods are made; in the afternoon, sales are made and revenue is received. The bakery will use the funds received to purchase new raw materials. In other companies, the operating cycle may last several weeks or even months.