Corporate finance is the branch of finance that focuses on the capital structure and funding sources of firms. Working capital is an essential component of corporate finance.
As it represents the difference between a company's current assets (like cash, inventory, and accounts receivable) and its current liabilities (like accounts payable and short-term debt).
That is why effective working capital management is essential for a company's financial health and growth. By keeping an eye on and making the best use of a company's current assets and obligations, it guarantees that it runs smoothly. Below are the terms associated with it:
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