Definition: Working Capital - Examples & Advice | Bolder Money

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Definition

Checking the difference between what the business owns and what it owes in the short term. A healthy balance means there’s enough money for daily expenses and small investments.

What to consider

Keep a buffer for unexpected expenses.
Balance short-term assets against liabilities.
Review working capital regularly.

Real world scenarios

A bakery reviews its daily cash and inventory to ensure there’s enough to purchase fresh ingredients each morning.
A tech startup in Silicon Valley monitors current assets to cover payroll and licensing fees.
A retail store adjusts its orders during slow seasons to maintain healthy working capital.

Related terms

Entrepreneurial Finances

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