What is a Working Capital Requirement?
The working capital requirement is the minimum amount of resources that a company requires to effectively cover the usual costs and expenses necessary to operate the business. Since the capital needs of each company will be a little different, there is no ideal working capital requirement that is universally applicable to all businesses, or even to companies engaged in the same industry. However, new companies can develop an idea of what type of working capital requirement they will need to operate at given levels by researching the cost and expenses associated with other corporations engaged in similar operations.
