Cash Management

Working Capital Requirement

Working Capital Requirement (WCR)

Amount the company must finance to cover the gap between receipts and disbursements related to its current operations.

Working capital is calculated as: Inventory + Accounts Receivable - Accounts Payable. A positive working capital means the company needs financing to cover this gap. In West Africa, working capital is often high due to long payment delays and significant inventory management. Optimizing working capital involves reducing DSO, increasing DPO and optimizing inventory.

Related terms

DSO (Days Sales Outstanding)DPO (Days Payable Outstanding)DIO (Days Inventory Outstanding)Cash Flow
← Back to glossary

Move from diagnosis to action

Try CassKai, check your compliance, or get a practical guide.

Start free trial Run a diagnosis Download guides

No credit card · Secure data