Working capital is the money tied up in the everyday running of the business. In our coffee shop, the offices we supply on credit owe us money, and the storeroom holds beans we already paid for. Both are our money sitting where it cannot be spent. Against that, we owe our own suppliers. Working capital is the first two minus the third.
Positive means a cushion of short-term assets over short-term bills, the normal state. Negative is possible, and even enviable, for businesses that collect from customers before paying suppliers.
The trend carries the signal. Working capital rising while revenue stays flat means cash is getting stuck, either in customers not paying or in stock not selling. On the cash flow statement, the change in working capital line shows the cash effect directly, where a negative value means growth in working capital swallowed cash. That is why a fast-growing business can report healthy profit yet weak operating cash flow: the growth is parked in unpaid bills and inventory.