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    rosalia's Avatar
    rosalia Posts: 3, Reputation: 1
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    #1

    Mar 17, 2011, 08:05 AM
    What is excess of working capital..
    What does workinf capital means ? What effect does it have on firm ?
    smoothy's Avatar
    smoothy Posts: 25,490, Reputation: 2853
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    #2

    Mar 17, 2011, 08:07 AM

    What do you think it is first?

    THe rules for homework at this link.

    https://www.askmehelpdesk.com/financ...-b-u-font.html
    rosalia's Avatar
    rosalia Posts: 3, Reputation: 1
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    #3

    Mar 18, 2011, 09:48 PM
    Excess of working capital means excess of assets over liabilities of a firm...
    smoothy's Avatar
    smoothy Posts: 25,490, Reputation: 2853
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    #4

    Mar 19, 2011, 12:05 PM
    Quote Originally Posted by rosalia View Post
    excess of working capital means excess of assets over liabilities of a firm....
    Yes... and it means what to the firm if you think about being flush with money? It's the same if it was you and you had extra money.
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    rosalia Posts: 3, Reputation: 1
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    #5

    Mar 22, 2011, 01:43 PM
    Yes you are right but business have their secret reserves which is unknown to their creditors and shareholders resulting in excess working capital.. the money comes from their profit earning capacity..
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