Negative working capital (See Chapters 11 and 12 of the Vernimmen) The operating cycles of companies with negative working capital are such that, thanks to a favourable timing mismatch, they collect funds prior to disbursing certain payments. There are two basic scenarios: 1) supplier credit is much greater than inventory turnover (see days’ inventory ratio), while at the same time, customers pay quickly, in some cases in cash; 2) customers pay in advance. A low or negative working capital is a boon to a company looking to expand without recourse to external capital. Efficient companies, in particular in mass-market retailing, all benefit from low or negative working capital. Negative working capital (See Chapters 11 and 12 of the Vernimmen) The operating cycles of companies with negative working capital are such that, thanks to a favourable timing mismatch, they collect funds prior to disbursing certain payments. There are two basic scenarios: 1) supplier credit is much greater than inventory turnover (see days’ inventory ratio), while at the same time, customers pay quickly, in some cases in cash; 2) customers pay in advance. A low or negative working capital is a boon to a company looking to expand without recourse to external capital. Efficient companies, in particular in mass-market retailing, all benefit from low or negative working capital. See all terms in the dictionary of finance To know more about it, look at what we have already written on this subject :

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Definitions of terms begining with the same letter as "Negative working capital" :

NASDAQ NAV NBV NOPAT NOPAT multiple NPV NWP NYSE Natural disaster risks Natural hedge Negative capital employed Negative covenant Negative working capital Net Book Value Net Written Premium Net asset value Net asset value of a fund, NAV

Net assets Net assets per share Net debt Net financial debt Net financial expense/income Net fixed assets Net income Net pension costs Net present value Net profit Net worth Net worth test Netting New equity puzzle Nominal rate Nominal value Nominee agreement

Non core-assets Non investment grade, non-investment grade Non recurrent items Non recurring items Non-monetary items Non-operating assets Non-operating working capital Non-recourse discounting Non-voting shares Normalised cash flow Normalised earnings Normative analysis Normative cash flow Normative margin Notes to the accounts Notional amount Notional pooling