Yes a negative capital means higher liabilities. In business such as retail this might be a good thing. Because this means that the company is running on someone else's money.
Jun 21 2013 11:26 AM
For example take a company like flipkart or amazon - they typically get 15-40 day credit from their suppliers. So this credit they get shows up as Accounts payables in the liability section. Within this 4o days flipkart/amazon will sell the product get the cash from the customer and pay off the liability. This is an example of how a negative working capital benefits the company.