6 Reasons Working Capital is the Blood and Nerve Center of a Business

6 Reasons Working Capital is the Blood and Nerve Center of a Business

Why working Capital is most Important Aspect of Every Business?
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Working capital is simply the amount of money that a business has to operate with. It is the current assets minus the current liabilities. Current assets include cash on hand, inventory and accounts receivable. Liabilities include accounts and notes payable, expenses, and current loan/debt payments.

Working capital represents the liquidity of a company, a measure of its value, efficiency or stability (depending on how you want to look at it).

Working capital is important primarily because it is the money that keeps a business running. With little working capital, a company won’t . . . work. Here are some of the ways that working capital is the lifeblood of a business.

1. Strengthening Solvency

Solvency is the measure of how much greater your assets are than your liabilities; it tells you how easily you can pay off your debts. Having sufficient working capital is the first and best way to pay off short-term liabilities. When you are able to easily pay salaries, equipment rentals, and other immediate costs, then your company can run more smoothly.

2. Moving Forward

One of the most effective ways to propel your business forward is with the use of working capital. When you have the right amount of disposable working capital, you can easily pay off any debts or costs and focus on investing for future expansion. Negative working capital (i.e. a situation where your liabilities are greater than your assets) means that you do not have the capacity to expand.

3. Developing Relationships

When a business is able to make all its necessary payments in a timely manner, it breeds trust and goodwill among its employees, with its vendors and other external agents. With sufficient working capital, a business never has to worry about running afoul of someone to whom it owes money.

4. Improving Health

Working capital can tell you how healthy your company currently is. The current liquidity of a business, also the net working capital, is one of the most important determinants of its health. Liquidity tells investors how easily a company’s assets can be converted into cash. As the amount of money available for day-to-day operations, working capital is intimately tied to liquidity and how easily work can get done in the business.

5. Getting Loans

Every business owner hopes to be able to expand his or her business. In cases where large expansions are planned, a loan may have to be taken out. When a business has good solvency and credit, it is more likely to be approved for a loan. Good working capital, therefore, helps you not only expand using your own resources but also helps you find external funding for expansion.

6. Handling Crises

Any business is likely to face a crisis at some time in its life. How these crises are handled depend largely on the working capital available to the business. Firms with good working capital are able to absorb blows to their revenue stream and keep moving forward.

Make Working Capital Work for You

Working capital is either expressed as a money value (assets minus liabilities) or as a ratio (assets over liabilities). Any business should aim for at least a working capital ratio of 1.2. Whether your company is just getting off the ground or has been operating for decades, managing working capital is key to its profitability.

Managing working capital is an important skill to have. As we have seen, a company’s working capital is one of the most important pieces of information to know regarding its current health and future profitability. Managers who understand working capital and how to use it stand poised to leverage its many benefits to increasing profits.

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Why Working With Special Populations Doesn't Make Me A Good Person

What you're missing from the bigger picture.
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"What do you do?" might be one of my least favorite questions. Let me tell you why.

I am currently a registered behavior technician at a wonderful program (MAP) nestled in the heart of North Carolina. Usually, when I tell someone what I do, their response is either an uncertain nod or a plain look of confusion. At that time, I break it down by saying, “Basically, I work with children who have autism."

Now, more times than not, the response I receive is along the lines of, “Wow, that's so amazing of you", or my personal favorite, “Good for you. I could NEVER do that."

I understand that working with special populations isn't for everyone, just like being a neurosurgeon isn't for everyone. But, working with special needs children doesn't make me a good person, a saint, or a hero. Every time someone tells you he/she is a teacher, do you gasp and express how much you could NOT be a teacher?

What about when you meet a pediatrician? These people work with children just like I do. I'm certain if you spent one day in my shoes you would see just how much you COULD do my job.

Maybe not all of the technical work, but after a day with these children, you would be humbled by how much you could learn from them.

After all, these children are just children. They want to be accepted just like every other child.

They want to be understood and to be part of a community just like the rest of us.

My job has given me the opportunity to get to know a handful of the more than 3.5 million Americans on the spectrum. I've gotten to know each of their personalities, their quirks, and what makes them unique. I can't help but imagine a world where everyone gets to know these individuals as I have.

A world where we accept all of those who might appear or act different from us and educate ourselves on these populations. A world where that education helps us see that they aren't so different from us after all.

Working with individuals with special needs doesn't make me a good person, because I do it for selfish reasons.

I work with them because I don't know what my life would be like without them. They have taught me so much and changed my life in so many ways. I get to play a small hand in these children's lives. I get to help them learn fundamental life skills you and I take for granted.

But, I also get to leave work every day having learned a lesson. These children have taught me to be a better version of myself and to appreciate even the smallest of things life has to offer. Each day they challenge me to laugh more, have more fun, and not take myself so seriously. They show me more love than I ever knew possible. Maybe it isn't with their words. Maybe it's with the smiles and giggles when we're singing their favorite song, or the way they look at me when they finally get something they have been working so hard to learn.

The hugs, the kisses, and the moments where our two worlds collide and we finally connect; these are the moments that remind me how much these children have to offer the rest of us. If only we would take the time to let them teach us, we would be more selfless, less judgmental, and have a greater appreciation for life.

April is National Autism Awareness Month.

My hope is that this month we work to spread awareness for Autism, as well as other special needs. We take this time to learn something new, to help educate others, and to stop looking at these individuals as though they need special people in their lives to help teach them and focus more on opening our minds to the things they can teach us.

Explore Odyssey's featured Autism Awareness content here.

Cover Image Credit: Katharine Smith

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4 Essentials You Need In The Elizabeth Holmes Starter Pack

Here are key artifacts that worked to conjure up such an individual.

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Elizabeth Holmes is one of the most infamous entrepreneurs of Silicon Valley. Her company, Theranos, which was once heralded as a groundbreaking health-care changer, deceived thousands of people, giving them false blood results and examinations.

What stunned people all over the globe, was Elizabeth herself. Her image, her demeanor, and her overall haunting presence became the center of several documentaries and past news articles. Here are 4 key artifacts that worked to conjure up such an individual.

1. Makeup 

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Ms. Holmes' beauty routine is quite consistent and easy-to-follow. For special occasions and public-speaking events, Elizabeth wears her signature black eyeliner, smeared all over the upper eyelid, and a muted red-colored shade of lipstick. Her eyebrows and face remain minimal, as the enhancement of Ms. Holmes' ice-blue eyes is the centerpiece of the look.

2. Black turtlenecks

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Several news outlets and documentaries make note of Elizabeth Holmes' obsession with Apple creator, Steve Jobs. In the midst of building her billion-dollar scheme, Holmes would adapt Job's characteristics and professional practices, such as live product launches and copying Apple's style of commercials. However, the most obvious form of imitation was Elizabeth wearing black turtlenecks every single workday.

3. Green juice

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Since Ms. Holmes worked long hours, she followed a diet that she believed would provide her energy and health. Theranos insiders reported that Elizabeth was never seen without her green juice, either in her hand or on her desk. At home, her personal chef would whip up a small dish of vegetables for dinner, giving the fraud a one-way ticket to malnutrition.

4. A deep baritone voice

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Of all the mysterious anecdotes written and said about the Silicon Valley scam, the most bewildering tale derives from Elizabeth Holmes' deep baritone voice. Luminaries who knew Elizabeth during her time at Stanford claimed that her speaking voice was high-pitched, typical of a young white female. As years passed, when Elizabeth was quickly gaining fame and momentum, her voice dropped a couple of octaves when she made public appearances. According to Theranos employees, when Elizabeth drank at company parties, her voice slipped back into the high-pitched tone.

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