Negative working capital

negative working capital
situation in which the current liabilities of a firm exceed its current assets.

Negative Working Capital
Financial & Investment Dictionary:
Negative Working Capital
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Negative working capital
Occurs when current liabilities exceed current assets, which can lead to bankruptcy.
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Could a firm have negative working capital, and still be in great shape? Yes! For instance, the firm may have a standby letter of credit at a bank that enables it to borrow money as needed to meet near-term obligations.

In young economies the first industries to develop are those with low or negative Working Capital % to sales. Negative Working Capital is where the organisation uses supplier credit or customer Prepayments to fund their day to day needs.
E.G.

Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, accounts receivable and inventory).
Also known as "net working capital".

Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, ...

A bond covenant that requires the borrower to grant lenders a lien equivalent to any liens that may be granted in the future to any other currently unsecured lenders.
Negative working capital ...

items of working capital are levels of inventory, accounts receivable, and accounts payable. Working capital can be expressed as a positive or a negative number. When a company has more debts than current assets, it has negative working capital.

See also: Expense, Profit margin, Saving, Negative Pledge, Banks