Introduction
Working capital refers to the funds available for the day-to-day operations of a business. It is the difference between current assets (like cash, inventory, receivables) and current liabilities (like payables and short-term loans).
Importance
- Ensures smooth functioning of daily activities.
- Helps in purchasing raw materials, paying wages, and covering short-term expenses.
- A sign of good financial health when managed properly.
Conclusion
Efficient working capital management helps rural entrepreneurs maintain liquidity and avoid business disruptions.