What financial aspect is affected by working capital levels?

The aspect affected by working capital levels is short-term financial health. Working capital, defined as current assets minus current liabilities, is crucial for assessing a company's liquidity, operational efficiency, and overall health in the short term.

High working capital indicates that a company has sufficient assets to cover its short-term obligations, which is vital for maintaining smooth operations, meeting unexpected expenses, and ensuring that there are no liquidity issues. It reflects a firm's ability to maintain its day-to-day operations without running into financial trouble.

In contrast, while long-term investment decisions, revenue forecasting, and market capitalization can be influenced by the overall financial health of a company, they are more linked to long-term strategic elements rather than the immediate liquidity and operational capabilities that working capital directly addresses.