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The Positive and Negative Effects of Working Capital
Working capital is the amount of money you've got tied up in stock. It's really the amount that your customers owe you, less the amount you can draw on your suppliers by not paying them immediately. I'm working capital for most companies as positive for a few industries, it's negative for others. For example, if you look at a supermarket, it doesn't have much in the way of trade receivables because only receivables are waiting for credit card company to pay.