What is Working Capital? Explain different strategies for Working Capital Management

Working capital is a crucial aspect of financial management that represents the difference between a company's current assets and current liabilities. It reflects the operational liquidity and short-term financial health of a business. Working capital management is essential for sustaining day-to-day operations and ensuring the smooth functioning of a company. Effective working capital management involves maintaining an optimal balance between current assets and liabilities to meet short-term obligations and support ongoing business activities.

Definition of Working Capital:

Working capital is the capital available for conducting day-to-day business operations. It is calculated as the difference between current assets and current liabilities. The formula for working capital is:

\[ \text{Working Capital} = \text{Current Assets} - \text{Current Liabilities} \]

Current assets include cash, accounts receivable, inventory, and other assets expected to be converted into cash or consumed within a year. Current liabilities consist of short-term ____ _____ ______ _________ ___ ___ _________ ______ _______.
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