Accounting for IGCSE & O level - Final Statements (Section 11 - No. 13)
Which of the following is a characteristic of a business with negative working capital?
It has more current assets than current liabilities.
It has more current liabilities than current assets.
It is in a very good liquidity position.
It has sufficient cash to pay all its running expenses.
Explanation
Negative working capital means current liabilities exceed current assets.