The MOST ASKED Finance Interview Question - Should Working capital be Negative or Positive?

Should working capital be negative or positive?
This is one of the most common interview questions in Finance.
In this video, we try and decode that. Working Capital is calculated as Current Assets - Current Liabilities. Common perception is that Current Assets should be higher than Current Liabilities.
However, if you run a business, would you want higher receivables or lower receivables.
Would you want high inventory or low?
Would you want higher payables or low?
The answers to the above questions will tell that as a business owner, we would like a negative working capital.
-------------------------------------------------------------------------------
Follow us on
CZcams - / finshiksha
LinkedIn - / finshiksha
Twitter - / finshiksha
Create a free account on www.finshiksha.com , and get complementary access to 3 Finance Courses. Find some of the best courses on Finance on our website.
---------------------------------------
FinShiksha is an IIM Calcutta alumnus venture and specializes in education in the financial services domain.
But we are more than just education providers; we help you build a career - and work with you during the process. Our programs help a candidate evaluate his/her strengths and hone them, at the same time spotting weaknesses and eliminate them. We teach, we hand-hold and we guide.
Our courses are built keeping in mind specific work roles, and are practical and extensive in nature. Many of our courses have projects embedded in those - to enable you to apply what you have learnt in the course. Visit our website www.finshiksha.com

[@hasanmahmud4808]

Excellent lecture ! Please do more !

[@satyanishthasharma5596]

Awesome content. Post more often.

[@FinShiksha]

Thanks! Sure, will try to.

[@nerdydoshi7014]

Very well explained. Another case of negative working capital but with high inventory levels is retail stores like lifestyle of shoppers stop... But I guess they also manage the business beautifully with high level of inventory and almost nil receivables.

[@shiwanirawat5337]

Very well explained sir, thank you 😊

[@FinShiksha]

Glad you liked it. Thanks.

[@parizatverma2876]

Brilliant

[@Roaring-Twenties]

That is very well explained, thanks a lot.

[@FinShiksha]

Glad it was helpful!

[@bishnuchourasiya128]

The most clear explanation so far thank you 🙏

[@FinShiksha]

Glad it was helpful!

[@johnvarga9009]

Great lecture, enjoyed this video.

[@FinShiksha]

Glad you enjoyed it!

[@rajatgupta7103]

Insightful, candid and cogent. Great work Peeyush sir:)

[@FinShiksha]

Glad you liked it!

[@yashjain9425]

Amazing video, lots of insights

[@FinShiksha]

Glad you enjoyed it

[@AfterZDanceCompany]

thank u sir

[@ajinkyaholkar7282]

liked the explanation. commenting to increase the channel's reach

[@FinShiksha]

Thanks a ton!

[@akulkanchan2734]

Great content. More videos please

[@FinShiksha]

Thank you! Will do!

[@FinShiksha]

Please do share the videos in your network!

[@abhisheksarath3972]

Why is cash not a current asser

[@kamalnchoudhury2528]

it is a current asset