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What is 'Working Capital Management'. Working capital management refers to a company's managerial accounting strategy designed to monitor and utilize the two components of working capital, current assets and current liabilities, to ensure the most financially efficient operation of the company.
Working capital is what remains on the balance sheet after the current liabilities are subtracted from the current assets. This is an indicator of how well the company can meet its financial obligations and therefore how solvent or liquid (able to convert assets to cash) the company is.