The total value of this capital might represent a business's ability to meet or exceed goals and expectations. This capital may contain operational materials or finances, but all of them together equal the operational capital. Operating capital is the capital value required for companies to continue their daily operations. We also share three examples of how companies calculate operating capital and make decisions based on the results. In this article, we define operating capital and its importance in business operations, and explain how to calculate it. Operating capital measures a business' liquidity, operational efficiency and short-term financial well-being and provides them with a figure to reference when making monetary decisions. Operating capital, also known as working capital, is the cash used for daily operations in a company.
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January 2023
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