How to increase working capital

Count the amount of working capital ratio of own funds that relates to the financial stability of the company. It characterizes the amount of working capital in the company, which are necessary for its financial sustainability. Calculate this ratio using the following formula: subtract from the amount of equity capital the ratio of current assets non-current assets.

Please note that when the indicator of sufficiency of own means will be low, your chances of getting credit will be low. However, there are various ways to make changes in the structure of accounting report thus, to achieve a growth of this ratio.

Reduce the value of the ratio of current assets to increase working capital own funds. It will also help you increase the amount of own capital and to reduce the amount of non-current assets.

Use other methods to increase own funds. This can be attributed to the income of all available or a specific part of accounts payable. In this case, the amount of equity will increase. However, this method is permissible only in respect of outstanding loans, for which the period of limitation is expired.

Contract for purchase and sale of the shares with deferred payment. Such an agreement will help you reduce the amount of non-current assets and to increase the amount of working capital. If in practice it turns out that the company does not intend to alienate its own shares in favour of other persons, then the specified documentation needs to include additional terms for deferment of payment and to specify that in the case of non-payment of the amount equal to the purchase cost of these shares in a certain (specific) period of time, they will be refundable by the company to the seller.