Explain Working Capital.

Working capital refers to the funds available for covering day-to-day operational expenses and short-term obligations of a business. It represents the difference between a company's current assets, such as cash, accounts receivable, and inventory, and its current liabilities, including accounts payable, short-term loans, and accrued expenses. Working capital is essential for maintaining the smooth functioning of business operations, managing cash flow fluctuations, and meeting short-term financial obligations, such as payroll, utilities, and supplier payments. Adequate working capital ensures that a company can sustain its operations, fulfill customer orders, and seize business opportunities without facing liquidity constraints. Monitoring and managing working capital effectively is critical for maintaining financial health, profitability, and liquidity in the short term while supporting long-term growth and sustainability.