Question

what are the drawbacks of the working capital​

Answer 1

Answer:

The disadvantages to negative working capital range from paying your suppliers late to the threat of bankruptcy/liquidation. How serious this is depends on why the amount is negative; if it's due to a one-off investment into new stock that is promptly paid for, you might avoid paying your debts late.

Explanation:

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Answer 2

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• Inability to Pay Expenses. Managers often prefer low working capital so they can invest extra funds in higher-yield finance products.
• Creditor Preference.
• Pressure to Collect Payments.
• Action Delays.