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Sir you mentioned higher working capital has higher liquidity but lower profitability but when you talked about conservative approach you talked about holding higher working capital but the liquidity was lower and the profitability was higher? is there something I am not understanding?
Working Capital = Current Assets – Current Liabilities
The working capital formula tells us the short-term liquid assets available after short-term liabilities have been paid off. It is a measure of a company’s short-term liquidity and is important for performing financial analysis, financial modeling, and managing cash flow.