MANAGEMENT

Detailed explanation-1: -This is possible if a company’s current assets are fully funded by current liabilities. Having zero working capital, or not taking any long-term capital for short-term uses, potentially increases investment effectiveness, but it also poses significant risks to a company’s financial strength.

Detailed explanation-2: -Working capital = current assets – current liabilities. Net working capital = current assets (minus cash)-current liabilities (minus debt). Operating working capital = current assets – non-operating current assets. Non-cash working capital = (current assets – cash) – current liabilities.

Detailed explanation-3: -Zero working capital is when a company has exactly the same amount of current liabilities as it does current assets. If current obligations exceed current assets, working capital may be negative.

Detailed explanation-4: -Working capital is the difference between a company’s current assets and current liabilities. It is a financial measure, which calculates whether a company has enough liquid assets to pay its bills that will be due within a year.