This is often caused by inefficient asset management and poor cash flow. Negative working capital, on the other hand, means that the business doesn’t have enough liquid assets to meet it current or short-term obligations. It also means that the business should be able to finance some degree of growth without having to acquire and outside loan or raise funds with a new stock issuance. Positive working capital is always a good thing because it means that the business is about to meet its short-term obligations and bills with its liquid assets. Practical Usage Explanation: Cautions and Limitations Positive vs.
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