Start with these questions
- What is working capital?
- Why does stock matter?
- How can I improve liquidity?
Understanding the topic
Working capital broadly compares short-term assets with short-term liabilities.
Why it matters to your business
It helps explain whether daily obligations can be funded. Connect this idea to your own records and decisions, then review what changes when you apply it.
Practical example for a Ghanaian business
A business has GHS 2,000 cash, GHS 3,000 customer receivables and GHS 5,000 stock, with GHS 6,000 short-term liabilities. Working capital is GHS 4,000, but cash is only GHS 2,000. The owner checks collection timing and stock movement before assuming every short-term bill can be paid today.
Illustrative example. This does not describe a BrightEdge customer or promise a financial result.
Common mistakes
- Buying too much stock while bills remain unpaid.
- Making a decision without checking the records and circumstances behind it.
Recommended actions
- Review cash, stock, amounts owed to you, and short-term bills.
- Write down the records or information you need and check any gaps.
- Choose who will complete the action, set a date and review the result.
Educational video
The video section is ready for the approved companion video. Read the explanation and complete the action above while video production is in progress.
General business education. Confirm current tax, legal and investment requirements before applying them to your circumstances.
Related BrightEdge support
Financial Reporting and Budgeting →