Working capital is the capital required to meet the day-to-day expenses of a business. It includes current assets like inventory, accounts receivable, and cash. There are two concepts of working capital - gross working capital, which is the total investment in current assets, and net working capital, which is current assets minus current liabilities. The document discusses the different types of working capital like regular, reserve, seasonal, and special working capital. It also outlines several factors that determine a business's working capital requirements such as the nature of the business, size of the business, production time, seasonality, turnover rate, and the business cycle.