MINIMIZING WORKING CAPITAL In the finance world, all successful firms efficiently manage their own working capital in many different ways. The term working capital originated with an old Yankee peddler who would load up his wagon and go off to peddle his merchandise (wares) for sale. This merchandise was called working capital because it was what he actually sold or turned a profit on to produce his profits. The wagon and the horse used are considered his fixed assets. He generally owned the horse and wagon, so those were always considered financed with equity capital, but his merchandise was always bought on credit, which was just like borrowing from the bank (his supplier). The more trips this peddler made each year, the faster his working capital grew. This was the start of working capital and is the main reason why a business places importance and finds many challenges pertaining to minimizing working capital. (Brigham & Houston, 2013, pg 535) Working capital is a financial metric which represents operating liquidity available to a business, organization or other equity, including governmental entity. Along with fixed assets such as plant and equipment, working capital is considered part of operating capital. Gross working capital equals to current assets. Net working capital (NWC) is calculated as current assets minus current liabilities. It is a deviation of working capital, which is commonly used in valuation techniques such as DCFs (Discounted cash flows). If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit. A company can be endowed with assets and profitability but short of liquidity if its assets cannot readily be converted into cash. Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient