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 everyday 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.

Cover Image Credit: Katharine Smith

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Starbucks Just Opened Its First-Ever Sign Language Location And We Are SO Here For It

Complete with the cutest mugs we've ever seen.

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On October 23rd, Starbucks opened their doors to the first ever U.S. signing store in Washington, D.C. In addition to the 20 to 25 people who are all fluent in American Sign Language, this location features lower tables, lower ordering counters, brighter lights, no background music, and larger text sizes, to accommodate for easier communication between baristas and customers.

Along with these features, the Washington, D.C. store, located in an existing Starbucks, includes tablets for customers to write their orders and screens to alert customers when drinks and food items are ready.

Aesthetically speaking, the new location will feature brighter lighting and many displays of ASL artwork. These original touches include "Starbucks" written in sign on aprons and in the window, a mural meant to encapsulate and celebrate deaf culture, and mugs designed by a deaf artist.

An article from Starbucks Newsroom says that there will be "a variety of enhancements to support the Deaf and hard of hearing partner and customer experience. Deaf baristas will have ASL aprons embroidered by a Deaf supplier, and hearing partners who sign will have an "I Sign" pin."

These are all initiatives put in place and sponsored by the Deaf Leadership of the Starbucks Access Alliance.

Store Manager Matthew Gilsbach, who is deaf himself, told Washingtonian in an interview, "We often talk about being the third place. We are your third place, you have your home, you have your work, and then you come here for a break between those two things to enjoy your day and your coffee," says Gilsbach. "So too does the deaf and hard of hearing community. And now they have direct access to other options for their third place. They don't have to feel isolated. Deaf and hard of hearing people have a place to come to call their own."

Starbucks has a history in both the positive and negative lights for getting involved in the news, and this store, creating opportunities for Deaf and hard of hearing customers, is yet another step in the right direction.

To find out how to sign your Starbucks order, Manager Matthew Gilsbach offers some tips here:

To all the pumpkin spice latte fans out there...

Starbucks Manager Matthew Gilsbach signing "pumpkin spice." Washingtonian

For all my friends who just like coffee...

Starbucks Manager Matthew Gilsbach signing "coffee." Washingtonian

And if you're trying to be polite...

Starbucks Manager Matthew Gilsbach signing "please and thank you." Washingtonian

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