working capital is the excess of current assets over current liabilities but companies like HUL,Godrej, Bharti airtel, Hero Motocorp, faces the negative working capital in their operating life. thus their current lliabilities exceed their current assests in some years.what is your belief in this regard,can working capital ever be negative or zero for any company? If yes than what shall be the repercussions if a company has(a) dearth of working capital (b)overloades of working capital
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Working capital ever be negative or zero for any company
Explanation:
- If a company has overloads of working capital such that excess of current assets over current liabilities such that then there will be no profits for the business and the business cannot earn rate of interest on return of investment.
- If a company has dearth of working capital if the current liabilities exceed their current assets then the business will lose its reputation and there will be shortage of finance to deal with the expenses and purchases of the company.
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what shall be the repercussions if a company has(a) dearth of working capital (b)overloades of working capital
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