Working capital refers to the funds used by a company for its day-to-day business operations. There are two types of working capital - gross working capital, which includes all current assets, and net working capital, which is current assets minus current liabilities. Working capital is needed to purchase raw materials, pay wages and expenses, provide customer credit, and maintain inventory levels. The document analyzes the working capital of PRAN-RFL Company over several years and finds its net working capital ratio has remained stable at around 173%, indicating the company maintains sufficient current assets to cover its current liabilities.