A good working capital ratio, typically ranging from 1.2 to 2, indicates that a company can easily cover its short-term liabilities with its short-term assets, reflecting financial health and operational efficiency. Ratios below 1 suggest potential liquidity issues, while those significantly above 2 may indicate inefficient use of resources. Maintaining an optimal ratio is crucial for ensuring smooth operations and financial stability.
Reimagine Your Order-To-Cash with AI
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Emagia is a leading provider of AI-powered Order-to-Cash (O2C) automation platform that modernizes finance operations for midsize to large global businesses. Many global businesses and shared service centers use Emagia’s Enterprise Receivables Management System to transform to digital world-class operations in credit, invoicing and payments, receivables, collections, deductions, cash application and cash forecasting. Emagia solutions improve their customers DSO, cash flow, credit risk, operational cost, compliance and profitability.
