Working capital refers to the money set aside for the day-to-day trading operations. It is calculated by subtracting the current liabilities from the current assets. Due to increased financial pressure, there has been increased working capital management. If a working capital management is efficient, there is a reduced holdings of current assets, such as inventory. It also leads to increased profitability. Working capital requirement is the value of funds needed by company so as to pay its debt obligations and other business expenses.