Working Capital for Retail – What You Need

Working capital funds day-to-day operations: stock, udhar given, payables.

Formula

Working capital = (Cash + Stock + Receivables) − Payables

You need enough to buy stock, give credit, and pay suppliers before you collect.

How Much

• Rule of thumb: 1–2 months of operating expense
• Depends on: Credit terms (yours vs suppliers), seasonality, growth
• Negative: Possible if you get long credit from suppliers and short from customers (rare for kirana)

Improve It

• Collect udhar faster
• Negotiate longer supplier credit
• Reduce excess stock
• Increase margin

Stockkeeper helps track stock and dues—key parts of working capital. Join the waitlist.