When discussing about How is working capital handled in the calculation of cash flows from a capital investment, and how it is added, subtracted, or ignored

It is important to analyze the current assets and current liabilities, to identify the working capital for example:

A company has the following

$150,000 in current assets

$50,000 in current liabilities

Therefore, it is to be said that the company have a $100,000 of working capital, which means that the company has that amount in the short-term to utilize if needing to raise money.

When a working capital percentage is high means that the current assets are higher than its current liabilities, which would indicate a positive matter, however, that is not always the case.

"High working capital isnt always a good thing. It might indicate that the business has too much inventory, not investing its excess cash, or not capitalizing on low-expense debt opportunities" (Fernando,2022)

It is essential to identify the importance of initial investment, and how it is the first step of the whole aspect in the business to analyze whether to make an investment or start a new project. How much working capital is required to assist with the investment or project.

I would enjoy reading your feedback in regards this topic as I am still learning and would like to engage more in dept, to gathered more knowledge. Let me know what you think.