Working capital refers to the difference between a company's current assets and current liabilities, representing the amount of liquid resources available to fund its day-to-day operations and short-term financial obligations. Working capital is a critical measure of a company's liquidity, operational efficiency, and financial health, indicating its ability to meet short-term liabilities, cover operating expenses, and sustain business operations without interruption. Positive working capital signifies that a company's current assets exceed its current liabilities, providing a financial buffer to manage cash flow fluctuations, invest in growth opportunities, and withstand economic downturns or unexpected expenses. Negative working capital, on the other hand, indicates that a company's current liabilities exceed its current assets, potentially signaling liquidity challenges, financial distress, or inefficiencies in managing working capital, requiring closer monitoring, corrective action, or capital injections to improve liquidity and operational stability. Working capital management involves optimizing the balance between cash, accounts receivable, inventory, and accounts payable to minimize the cash conversion cycle, maximize operational efficiency, and enhance overall profitability and shareholder value.