![]() Negative working capital represents a financial statement when its current liabilities exceed its current assets as stated on the firm’s balance sheet. A negative working capital situation creates excess cash for a growing business but requires cash investment as a business declines. What is negative working capital? A buyer usually considers negative working capital in a target as detrimental because it signifies additional capital. ![]() Working capital as the name suggests refers to that capital which is needed for the working of the company and without this capital, a company will not be able to function smoothly. Negative Working Capital and Indian Corporates A Having more current liabilities than current assets, a sign of imminent danger. Negative Working Capital and Indian Corporates A from That’s how you can answer this question: Negative working capital represents a financial statement when its current liabilities exceed its current assets as stated on the firm’s balance sheet. This means that the liabilities that need to be paid within one year exceed the current assets that are monetizable over the same period. ![]() A buyer usually considers negative working capital in a target as detrimental because it signifies additional capital.
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