Working capital is a measure of a company’s short-term liquidity, and it can be affected by changes in the business strategy. For example, if the strategy involves expanding production or increasing sales volume to drive growth, more cash may be needed for purchasing inventory or paying for marketing campaigns. These investments could result in higher levels of working capital as more cash is used to fund operations. On the other hand, if the company adopts a cost-cutting strategy that involves reducing overhead expenses such as salaries and benefits, there may be a decrease in working capital as less money is required to fund these activities. Additionally, changes in business strategies may also affect accounts receivable and payable cycles which can have an effect on working capital levels.

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