<P> A company can be endowed with assets and profitability but short of liquidity if its assets can not readily be converted into cash . Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short - term debt and upcoming operational expenses . The management of working capital involves managing inventories , accounts receivable and payable , and cash . </P>
<P> A company can be endowed with assets and profitability but short of liquidity if its assets can not readily be converted into cash . Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short - term debt and upcoming operational expenses . The management of working capital involves managing inventories , accounts receivable and payable , and cash . </P>
the primary reason that a firm has an investment in working capital is to
the primary reason that a firm has an investment in working capital is to
ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short - term debt and upcoming operational expenses
ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short - term debt and upcoming operational expenses