but if company collects cash from their customers, d receivable balance goes down, and cash balance goes up. in short it wont affect overall current assets. than how working capital can go negative?????suppose i buy inventory of rs 1000 on credit for 30 days..i sell d same after procesing to my customers on 15 days credit for 1200..so my accounts payable balance will be 1000, and accounts receivable balance is 1200. on 15th day when i receive cash, my receivable balance will be nil and my cash balance will be 1200..but overall current assets remains same...so how does working capital turns negative????
May 02 2012 09:45 PM