What does working capital indicate about a business?

Working capital is a financial metric that represents the difference between a company's current assets and current liabilities. It primarily indicates a business's short-term financial health and liquidity. A positive working capital suggests that a company has enough assets to cover its short-term obligations, which is crucial for ongoing operations. It reflects the ability to meet day-to-day expenses, manage inventory, and handle any unexpected costs that may arise.

In contrast, the other aspects indicated by the remaining choices focus on different dimensions of a business’s financial status. Long-term financial health pertains to a company’s ability to sustain itself or grow over a longer time horizon, contingent on factors beyond just current assets and liabilities. Profitability over time relates to the capacity of the firm to generate earnings exceeding expenses, which does not solely hinge on working capital. Finally, market share growth deals with the competitive positioning and sales performance of the business, none of which are directly assessed through working capital metrics. Thus, working capital is distinctly tied to short-term financial health and liquidity, making it the most appropriate choice in this context.