Thankyou ..i got the concept of financing problems due to overtrading ..i just dont understand what is too low WC and too high WC ?
Is it simply this that ..
REC. + INV - PAYB = 500 (this is high)
REC + INV - PAYB = 100 (this is low)?
Or some other concept is there like based on cash availability.. less the cash available to finance daily operations ..lower the WC level and vice versa ?
Ask the Tutor ACCA FM
Working capital
7y ago#1As I wrote before, you cannot look at the absolute figure in isolation and say that it is high or low.
It depends on the type of business and on the size of the business.
Sign in to reply to this topic.