{"id":7828,"date":"2024-01-23T11:08:30","date_gmt":"2024-01-23T10:08:30","guid":{"rendered":"https:\/\/www.gestioncreditexpert.com\/working-capital-requirement-what-is-it\/"},"modified":"2026-06-25T15:13:09","modified_gmt":"2026-06-25T13:13:09","slug":"working-capital-requirement-what-is-it","status":"publish","type":"post","link":"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/","title":{"rendered":"Working capital requirement: what is it?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Working capital requirement<\/strong> (commonly <strong>referred to as WCR<\/strong> ) is a key financial indicator for all businesses. <strong>It measures the difference between the resources the company uses to finance its operating cycle and the time it takes to transform its assets into cash<\/strong> . Why is it important to assess the WCR, how to calculate it, and how to properly interpret the results? GESTION CREDIT EXPERT, <strong><a href=\"https:\/\/www.gestioncreditexpert.com\/en\/\"><span style=\"text-decoration: underline;\">debt recovery company<\/span><\/a><\/strong> , answers these questions.  <\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Definition_of_BFR\"><\/span>Definition of BFR<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">Definition: <a href=\"https:\/\/fr.wikipedia.org\/wiki\/Besoin_en_fonds_de_roulement\"><span style=\"text-decoration: underline;\">WCR<\/span><\/a> represents the difference between the financial resources a company uses to finance its operational activities (inventories, customer receivables, etc.) and the time needed to convert these assets into cash.  <\/p>\n\n<p class=\"wp-block-paragraph\">The operating cycle of a business generally includes the following stages:  <\/p>\n\n<ol class=\"wp-block-list\">\n<li><strong>Procurement of raw materials<\/strong> : The company purchases raw materials for the production of goods or provision of services.<\/li>\n\n\n\n<li><strong>Production<\/strong> : raw materials are transformed into finished products or services are provided.<\/li>\n\n\n\n<li><strong>Storage of finished products<\/strong> : finished products are stored while waiting to be sold.<\/li>\n\n\n\n<li><strong>Sales<\/strong> : finished products are sold to customers.<\/li>\n\n\n\n<li><strong>Customer receivables<\/strong> : customers have a payment deadline, which creates receivables.<\/li>\n<\/ol>\n\n<p class=\"wp-block-paragraph\">The WCR represents the gap between the purchase of raw materials and payment by customers for the goods or services provided.  <\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_calculate_the_BFR\"><\/span>How to calculate the BFR?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">The WCR must be calculated regularly, because <strong>it has a direct impact on the company&#8217;s cash flow<\/strong> . It is calculated as follows:<\/p>\n\n<p class=\"wp-block-paragraph\"><strong><em>WCR = Inventories + Customer receivables &#8211; Supplier debts<\/em><\/strong><\/p>\n\n<ul class=\"wp-block-list\">\n<li><strong>Inventories<\/strong> represent raw materials, goods or finished products currently being produced or sold.<\/li>\n\n\n\n<li><strong>Customer receivables<\/strong> represent amounts owed by customers for products or services already delivered or sold.<\/li>\n\n\n\n<li><strong>Supplier debts<\/strong> represent amounts owed to suppliers for products or services already purchased.<\/li>\n<\/ul>\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"646\" src=\"https:\/\/www.gestioncreditexpert.com\/wp-content\/uploads\/2024\/06\/Le-besoin-en-fond-de-roulement-quest-ce-cest-1024x646.png\" alt=\"WCR calculation\" class=\"wp-image-8442\" srcset=\"https:\/\/www.gestioncreditexpert.com\/wp-content\/uploads\/2024\/06\/Le-besoin-en-fond-de-roulement-quest-ce-cest-1024x646.png 1024w, https:\/\/www.gestioncreditexpert.com\/wp-content\/uploads\/2024\/06\/Le-besoin-en-fond-de-roulement-quest-ce-cest-300x189.png 300w, https:\/\/www.gestioncreditexpert.com\/wp-content\/uploads\/2024\/06\/Le-besoin-en-fond-de-roulement-quest-ce-cest-768x485.png 768w, https:\/\/www.gestioncreditexpert.com\/wp-content\/uploads\/2024\/06\/Le-besoin-en-fond-de-roulement-quest-ce-cest-1536x969.png 1536w, https:\/\/www.gestioncreditexpert.com\/wp-content\/uploads\/2024\/06\/Le-besoin-en-fond-de-roulement-quest-ce-cest-2048x1292.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n<p class=\"wp-block-paragraph\">A <strong>variation in WCR<\/strong> can also be calculated on a periodic basis to monitor its evolution over time. In general, a <strong>reduction in WCR<\/strong> is considered positive because it frees up funds that can be used for other purposes, while an increase in WCR can signal potential cash flow difficulties.<\/p>\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Example_of_calculating_a_BFR\"><\/span>Example of calculating a BFR<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n<p class=\"wp-block-paragraph\">Suppose a production company has the following characteristics:  <\/p>\n\n<ul class=\"wp-block-list\">\n<li>Annual turnover: \u20ac10,000,000<\/li>\n\n\n\n<li>Stocks of raw materials: \u20ac200,000<\/li>\n\n\n\n<li>Stocks of finished products: \u20ac500,000<\/li>\n\n\n\n<li>Customer receivables: 40% of sales, payable within 30 days<\/li>\n\n\n\n<li>Supplier debts: 60% of purchases, payable within 60 days<\/li>\n<\/ul>\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Calculation_of_WCR_working_capital_requirement\"><\/span>Calculation of WCR (working capital requirement)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n<ul class=\"wp-block-list\">\n<li>Stocks<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">Stocks of raw materials: \u20ac200,000 x 1.5 \/ 12 months = \u20ac25,000<\/p>\n\n<p class=\"wp-block-paragraph\">Stocks of finished products: \u20ac500,000 x 8 \/ 365 days = \u20ac10,960<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Receivables<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">40% of sales: \u20ac10,000,000 x 40\/100 = \u20ac4,000,000<\/p>\n\n<p class=\"wp-block-paragraph\">30 days of rotation: \u20ac4,000,000 \/ 30 days = \u20ac133,333<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Payables<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">60% of purchases: \u20ac10,000,000 x 60\/100 = \u20ac6,000,000<\/p>\n\n<p class=\"wp-block-paragraph\">60 days of rotation: \u20ac6,000,000 \/ 60 days = \u20ac100,000<\/p>\n\n<p class=\"wp-block-paragraph\">Need in funds<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Stocks: \u20ac25,000 + \u20ac10,960 = \u20ac35,960<\/li>\n\n\n\n<li>Customer receivables: \u20ac133,333<\/li>\n\n\n\n<li>Supplier debts: \u20ac100,000<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\"><strong><em>WCR = \u20ac35,960 + \u20ac133,333 &#8211; \u20ac100,000 = \u20ac48,333<\/em><\/strong><\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_WCR_in_the_case_of_service_activities\"><\/span>The WCR in the case of service activities<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">In the context of service activities, the WCR is generally lower than in the context of production activities. Indeed, <strong>service activities do not require the purchase of raw materials or goods<\/strong> , which reduces working capital requirements.<\/p>\n\n<p class=\"wp-block-paragraph\">The WCR of service activities mainly consists of current charges to be advanced. Service companies generally invoice their services after their completion, which creates this gap between the collection of revenues and the expenses incurred.<\/p>\n\n<ul class=\"wp-block-list\">\n<li>The formula for <strong>calculating the WCR<\/strong> is simplified to:<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\"><strong><em>WCR = Work in progress + Average outstanding customer receivables &#8211; Average outstanding customer deposits<\/em><\/strong><\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_calculate_your_working_capital_requirement\"><\/span>Why calculate your working capital requirement?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\"><strong>Calculating your working capital requirement<\/strong> is a simple operation that provides essential information for managing a business.  <\/p>\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Before_starting_a_business\"><\/span>Before starting a business<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n<p class=\"wp-block-paragraph\"><strong>Calculating your WCR<\/strong> before creating a business is important for several reasons:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>To assess the feasibility of the creative project: if the needs are too great, it may be difficult to finance them, which may jeopardize the viability of the project. By understanding working capital requirements, an entrepreneur ensures that the business has the necessary resources to operate efficiently from the start. It also checks that the chosen economic model is sustainable over time.<\/li>\n\n\n\n<li>To identify the different financing options: by calculating the WCR, an entrepreneur can determine whether he will need external financing, such as bank loans for example.  <\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Calculate_your_WCR_throughout_the_life_of_the_company\"><\/span>Calculate your WCR throughout the life of the company  <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<ul class=\"wp-block-list\">\n<li>To monitor the evolution of the financial health of the company. By regularly calculating its WCR, the company can identify possible risks of cash flow difficulties.<\/li>\n\n\n\n<li>To make strategic decisions and positively influence the financial situation of the company. For example, it may decide to reduce its inventory, negotiate shorter payment terms with its suppliers or increase its sales prices.<\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_difference_between_the_BFRE_and_the_BFRHE\"><\/span>What is the difference between the BFRE and the BFRHE?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">The BFRE (operating working capital requirement) and the BFRHE (non-operating working capital requirement) are two versions of the concept of WCR. The main difference between the two is that the BFRE only takes into account the elements linked to the operation of the company, while the BFRHE takes into account all the elements of the balance sheet (purchase of capital goods, land or buildings, investments in R&amp;D, etc.).<\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_interpret_your_working_capital_requirement\"><\/span><strong>How to interpret your working capital requirement?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\"><strong>The interpretation of the BFR depends on its value.<\/strong>  A positive, zero or negative WCR indicates different situations:  <\/p>\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_What_is_a_positive_BFR\"><\/span>1) What is a positive BFR?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n<p class=\"wp-block-paragraph\">A positive WCR <strong>means that the company needs funds to finance its operating cycle<\/strong> . This need may be due to several factors, such as a long payment or stock turnover period. The company must therefore find sources of financing to cover its WCR. These sources of financing can be internal (reserves or profits) or external (bank loans or subsidies for example).<\/p>\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_WCR_zero\"><\/span>2) WCR zero<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n<p class=\"wp-block-paragraph\">A zero WCR <strong>means that the company does not need additional financing<\/strong> . The resources generated by the activity are sufficient to cover the needs of the company, <strong>without excess cash flow<\/strong> .<\/p>\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_What_is_a_negative_BFR\"><\/span>3) What is a negative BFR?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n<p class=\"wp-block-paragraph\">A negative WCR <strong>means that the company has excess funds to finance its operating cycle<\/strong> . This is a good thing if the company uses this excess cash to invest or reduce debt. This situation often occurs in industries where customers make cash payments.  <\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Financing_and_financial_ratios\"><\/span><strong>Financing and financial ratios<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">It is necessary to fully understand how the BFR works and to finance it optimally. <a href=\"https:\/\/www.compta-facile.com\/ratios-financiers-calculs-et-explications\/\"><span style=\"text-decoration: underline;\"><strong>Financial ratios<\/strong><\/span><\/a> can be a valuable tool for analyzing working capital requirements and identifying levers for improvement.<\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_finance_your_working_capital_requirement_WCR_when_starting_your_business\"><\/span>How to finance your working capital requirement (WCR) when starting your business?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">When starting the activity, companies often have a significant WCR. And to finance it, there are several solutions:<\/p>\n\n<ul class=\"wp-block-list\">\n<li><strong>Bank overdraft<\/strong> is a common solution, but it is also risky and expensive. Indeed, banks charge overdraft fees, as well as interest on the overdraft amount. This is a solution that must remain temporary.<\/li>\n\n\n\n<li><strong>Contributions into current accounts<\/strong> from partners or shareholders are a more advantageous solution than bank overdrafts. A sum is paid by a partner into the treasury of his company.  <\/li>\n\n\n\n<li><strong>Working capital<\/strong> is a long-term solution. This is equity capital provided by partners or shareholders.<\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Financial_ratios_linked_to_working_capital_requirements\"><\/span>Financial ratios linked to working capital requirements  <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">Financial ratios are used to analyze the financial situation of a company. Certain variables are particularly useful for analyzing WCR:  <\/p>\n\n<ul class=\"wp-block-list\">\n<li><strong><a href=\"https:\/\/www.economie.gouv.fr\/dgccrf\/Publications\/Vie-pratique\/fiches-pratiques\/Delais-de-paiement\"><span style=\"text-decoration: underline;\">Supplier payment time<\/span><\/a><\/strong> measures the time it takes a company to pay its suppliers. It is calculated as follows:  <\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">Deadline (in number of days) = (supplier debts including tax \/ purchase including tax) x the number of days of the period concerned.  <\/p>\n\n<ul class=\"wp-block-list\">\n<li><strong><a href=\"https:\/\/entreprendre.service-public.fr\/vosdroits\/F23211\"><span style=\"text-decoration: underline;\">Customer payment time<\/span><\/a><\/strong> measures the time it takes for a business to receive payments from its customers. It is calculated as follows:  <\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">Deadline (in number of days) = (customer receivables including tax \/ turnover including tax) x the number of days of the period concerned.  <\/p>\n\n<ul class=\"wp-block-list\">\n<li><strong><a href=\"https:\/\/www.compta-online.com\/ratio-de-rotation-des-stocks-comment-le-calculer-ao5072\"><span style=\"text-decoration: underline;\">Inventory turnover time<\/span><\/a><\/strong> measures the time it takes a company to sell its inventory. It is calculated as follows:  <\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">Lead time (in number of days) = (stock of goods \/ production or purchase cost) x the number of days in the period concerned.  <\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_improve_your_WCR\"><\/span>How to improve your WCR?  <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\"><strong>Improving WCR<\/strong> remains a key element of corporate financial management. By reducing certain components of WCR such as trade receivables, companies can improve their cash flow and strengthen their financial situation. To <strong>control its WCR<\/strong> , the company must pay attention to the following points:  <\/p>\n\n<ul class=\"wp-block-list\">\n<li>Good inventory management (reduction of inventory turnover time),<\/li>\n\n\n\n<li>Reduction of customer receivables,<\/li>\n\n\n\n<li>Reducing supplier debts (negotiating payment deadlines),<\/li>\n\n\n\n<li>The choice of the method of <strong>financing the BFR<\/strong> (bank overdraft, contribution to current accounts, etc.),<\/li>\n\n\n\n<li>Up-to-date accounting.<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">For businesses, <strong>regular monitoring of working capital is essential to ensure good cash flow management<\/strong> . A WCR that is too high can in fact lead to payment difficulties or even a cessation of activity. At <strong>GESTION CREDIT EXPERT<\/strong> , our <strong>BFR EXPERTS<\/strong> consultants support you from A to Z in the management of your receivables, in order to optimize your BFR. Do not hesitate to contact us for more information.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#Definition_of_BFR\" >Definition of BFR<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#How_to_calculate_the_BFR\" >How to calculate the BFR?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#Example_of_calculating_a_BFR\" >Example of calculating a BFR<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#Calculation_of_WCR_working_capital_requirement\" >Calculation of WCR (working capital requirement)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#The_WCR_in_the_case_of_service_activities\" >The WCR in the case of service activities<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#Why_calculate_your_working_capital_requirement\" >Why calculate your working capital requirement?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#Before_starting_a_business\" >Before starting a business<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#Calculate_your_WCR_throughout_the_life_of_the_company\" >Calculate your WCR throughout the life of the company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#What_is_the_difference_between_the_BFRE_and_the_BFRHE\" >What is the difference between the BFRE and the BFRHE?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#How_to_interpret_your_working_capital_requirement\" >How to interpret your working capital requirement?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#1_What_is_a_positive_BFR\" >1) What is a positive BFR?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#2_WCR_zero\" >2) WCR zero<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#3_What_is_a_negative_BFR\" >3) What is a negative BFR?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#Financing_and_financial_ratios\" >Financing and financial ratios<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#How_to_finance_your_working_capital_requirement_WCR_when_starting_your_business\" >How to finance your working capital requirement (WCR) when starting your business?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#Financial_ratios_linked_to_working_capital_requirements\" >Financial ratios linked to working capital requirements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.gestioncreditexpert.com\/en\/working-capital-requirement-what-is-it\/#How_to_improve_your_WCR\" >How to improve your WCR?<\/a><\/li><\/ul><\/nav><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Working capital requirement (commonly referred to as WCR ) is a key financial indicator for all businesses. It measures the difference between the resources the company uses to finance its operating cycle and the time it takes to transform its assets into cash . Why is it important to assess the WCR, how to calculate [&hellip;]<\/p>\n","protected":false},"author":311,"featured_media":7826,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[26],"tags":[],"class_list":["post-7828","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Working Capital Requirement (WCR): Definition &amp; Calculation | GCE<\/title>\n<meta name=\"description\" content=\"What is working capital requirement (WCR)? 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