Working capital
Working capital is current assets minus current liabilities: the short-term resources a business has to cover the obligations falling due within the next year.
Current assets are cash, inventory and money owed by customers. Current liabilities are unpaid invoices, wages, tax and any borrowing due within twelve months. Subtracting one from the other gives working capital as an amount; dividing instead gives the current ratio, which says much the same thing as a multiple. Both are read off the balance sheet on its closing date.
Growth consumes it. A company doubling its sales has to buy stock and pay staff before its customers settle their invoices, so cash leaves months before it comes back. That is how a profitable, fast-growing business runs out of money, and it is why an increase in working capital is subtracted when profit is turned into free cash flow, while a fall in it is added back.
More is not automatically better, which is the part most often misread. A large positive figure can mean a sensible buffer, or it can mean warehouses of unsold stock and invoices nobody has chased. Some strong businesses run it negative deliberately: supermarkets and subscription companies collect from customers before they pay their suppliers, so customers fund day-to-day operations. What the figure is made of matters more than whether it is big.