Sunday, June 10, 2012

Negative Net Working Capital

Negative numbers are generally bad, however a recent survey of the communications sector in 2011 found that the best performing companies actually had negative working capital. While negative working capital can be dangerous, especially if liquidity gets tighter, the advantage is that you are actually using other companies' money for free. http://www3.cfo.com/article/2012/6/cash-flow_cash-flow-operating-working-capital-digitalglobe