Business
Working capital is the liquidity that is needed to run the business to pay your obligations. Some people call it cash flow, but essentially the ability to pay your obligations in your business and how quickly you can turn orders to cash is how we define working capital. Accounts receivable management is important to maintain positive liquidity. Cash is king!Many small businesses don’t have good policies in place to maintain good cash flow management. It’s easy to let your payables bloat when it’s not being managed every day.In this episode we discuss:Coverage ratio and what it meansExcess working capital and what that meansWhat is good for a buyer?What is good for a seller?OvercapitalizationWhat is the required amount of working capital to have to operate?Harvesting working capitalAccounts receivable management