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Sir suppose current assets are 10000 financed by over draft 10000 when calculating working capital CA- CL then it will be zero. Same with paybles( short term financing) So can we say working capital only shows capital put in via long term sources?
the overdraft if short-term finance and so the current assets will be all financed by short-term finance.
But when we are calculating the working capital/ net current assets it will be zero so if it is zero then should we understand it as being financed via short term soucres?
If net current assets are zero, the none of the financing is coming from long-term finance. However the current assets are still being financed from short-term finance.