Negative working capital

Negative working capital occurs when a business has more current liabilities than current assets. This situation can be a cause for concern for lenders and creditors, since the firm may not have sufficient liquid assets to pay for its short-term obligations. However, if an organization has a line of credit, it can readily draw down the line to pay for liabilities as they come due.

Related Courses

The Interpretation of Financial Statements 
Working Capital Management