Why This Matters
Working capital is where profitability and liquidity meet. A company can be profitable and still run out of cash if working capital is poorly managed — receivables grow faster than collections, inventory accumulates beyond what is needed, or payment terms shift unfavourably. For mid-market companies, where external financing is more constrained than in large corporates, working capital management is a primary determinant of whether the business can fund its own growth or needs to borrow to cover operational gaps.
Where This Fits
This term sits within the Reporting Infrastructure area of Performance & Control.