Cash and cash equivalents—including cash, such as funds in checking or savings accounts, while cash equivalents are highly-liquid assets, such as money-market funds and Treasury bills. Marketable securities—such as stocks, mutual fund shares, and some types of bonds.
What qualifies as working capital?
In short, working capital is the money available to meet your current, short-term obligations. To make sure your working capital works for you, you'll need to calculate your current levels, project your future needs and consider ways to make sure you always have enough cash.
What is working capital for banks?
Working capital is used to finance a company's current operations, such as purchasing inventories, collecting accounts receivable (AR) from customers, obtaining credit from vendors, and producing and shipping products. Working capital is a measure of a company's financial strength.
How is working capital paid back?
The loan is usually repaid by the time the company hits its busy season and no longer needs the financing. Missed payments on a working capital loan may hurt the business owner's credit score if the loan is tied to their personal credit.
Are deposits working capital?
If the company collects customer deposits, the account balance is likely to fluctuate, but it remains a source of working capital and cash.
Does working capital include customer deposits?
The standard components of NWC are accounts receivable plus inventory less accounts payable and accrued expenses. There can be other assets and liabilities that fall into NWC, and one that can be a challenge to deal with is deferred revenue/customer deposits.