Guide to Change in Net Working Capital

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is Working Capital?
What Is Net Working Capital?
What Causes Changes in Working Capital?
Credit Policy
Accounts Payable Payment Period
Collection Policy
Growth Rate
Inventory Planning
Purchasing Practices
Hedging
What Impacts Can Various Changes in Working Capital Have?
Positive Impacts
Negative Impacts
Calculating Change in Working Capital
Why Calculating Changes in Working Capital Is Important
The Takeaway
3 Small Business Loan Tips
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Frequently Asked Questions
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About the Author
Mike Zaccardi, CFA, CMT, is a finance expert and writer specializing in investments, markets, personal finance, and retirement planning. He enjoys putting a narrative to complex financial data and concepts; analyzing stock market sectors, ETFs, economic data, and broad market conditions; and producing snackable content for various audiences.
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