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Over the last few decades, companies sharpened their focus on delivering desirable returns to shareholders and embraced some form of return on capital, economic profit or a comparable performance measure. This focus on high returns led companies to scrutinize not just their capital investments, but their use of net operating working capital as well. Net operating working capital consists primarily of inventory and accounts receivable less accounts payable and accrued expenses. Cash balances are often excluded, although it could be argued that some balance of cash is required to run operations. Short-term debt and debt equivalents are also excluded as these are sources of capital provided by entities that expect a return on their investment.

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