Working capital
Also: operating working capital, trade working capital
Working capital in retail is mainly inventory plus trade receivables less trade payables, often reported as operating or trade working capital. It is the cash tied up in running the business. Fast-turning retailers that sell for cash before paying suppliers can run it negative, so growth releases cash; a rise in working capital absorbs cash even when profit grows.
Supplier payment terms, stock depth and wholesale credit terms all sit in this line, so buying, finance and sales teams each move it. Slower sell-through shows here first, as more inventory, before it reaches gross margin.
adidas' operating working capital rose 17.9% to €6,661m on sales up 10.2%, and average operating working capital was 24.0% of sales against the full-year guide of 22% to 23%.