Working capital is commonly calculated as current assets, such as cash, receivables, and inventory, minus current liabilities, such as payables and short-term debt. Positive working capital means the business has more short-term resources than short-term obligations, although the timing of those items still matters.
Growing businesses often need more working capital than they expect, because receivables and inventory grow ahead of the cash they eventually produce. Contractors with retainage and farms with inventory of raised commodities are classic examples, where profitable growth can still strain cash.