Definition of working Capital and benefits of its analysis

As an accountant, you must know working the working capital and benefits of its analysis. Dear working capital means excess of current asset over current liabilities. In other word. If your current assets are more than your current liabilities. These more current assets are known as working capital. For doing your business with better way, the business must have working capital every time. If you have more current assets than your current Liabilities , it means you can buy your stock of business , you can pay your creditors . All time when your investor or any body who want to give you loan will see you working capital . If your liquid capital is non , nobody will give you any debt or goods on credit . So it is the duty of accountant of business . To make some working capital so that your business will grow with the help of loan and debt. For this I am giving some tips.

◙ Each time when you pass the voucher entry in tally or any other computer accounting software , then see what is the position of your working capital.
◙ If you see that there is no working capital, when current assets are equal to current liabilities , or current liabilities are more than current assets this will be very serious position when working capital is in negative. At this time, you must sell some fixed assets so that you can keep your working capital position in positive.
◙ Never give goods on credit to any body who has not good dealing with you