What are the uses of working capital?
2 min read
Working capital indicates a company's short-term financial health required to run a business's daily operations. Following are the uses of working capital:
- Maintaining an optimum level of inventory
- Paying creditors on time
- Having a cash reserve
- Managing short-term debts
- Meeting unforeseen or unpredictable expenses
- Meeting miscellaneous day-to-day business expenses
In some cases, when a business might experience a cash crunch due to an impending financial contingency, it may require a working capital loan.
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