As an e-commerce seller, it’s crucial to understand how your cash affects your stress level. We learned in last week’s video that online sellers have a longer-than-average cash flow cycle, and keeping track of how much liquid capital you have in your business can be the difference between a confident plan for the future and an ulcer.
In the second installment of our “Cash is King” series on the blog, Tyler explains the definition of working capital and how it can affect your perception of your business’s debt.
Let’s jump in:
- Working capital can be thought of as cash that hasn’t been immediately spoken for (liquidity).
- You can calculate your business’s working capital by subtracting your current liabilities from your current assets.