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Working capital is the difference between a company’s current assets and current liabilities and is indicative of the company’s liquidity position and financial health. Working capital management is vital to ensure that the company has enough liquidity to fund its short-term expenses and ensure all excess cash is invested wisely. However, enterprises face several challenges while managing their working capital.
Let’s take a look at some of the common working capital challenges:
This article is the second in the series ‘Understanding the facets of working capital management’.
Read next – 5 strategies to effectively manage your working capital.