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Business owners need to maintain sufficient levels of working capital to fund their operations and service debt throughout the year. Small businesses without access to large lines of credit are particularly vulnerable to the problems caused by a lack of working capital. Understanding how to calculate working capital will help you keep abreast of your financial situation and take steps to address potential cash shortfalls.Gather your financial records, such as your balance sheet, general ledger, cash flow statement and accounts receivables and payables reports.
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