1. What does negative working capital mean?Negative working capital means a company’s current liabilities exceed current assets (excluding cash). This can be positive in industries like retail or fast food, where companies receive cash from customers quickly but delay paying suppliers (e.g., Amazon, McDonald’s). However, in other industries, it may signal liquidity issues or poor financial healt..

1. AccountingQ: What happens on the 3 financial statements when inventory goes up by $10, assuming you pay for it with cash?A: Inventory increase of $10 doesn’t affect the income statement. On the cash flow statement, it appears as a negative change in working capital, reducing cash flow by $10. On the balance sheet, inventory increases by $10 under current assets and cash decreases by $10, keep..