https://youtu.be/CrTsCstZ7MI?feature=shared How many companies in the S&P 500 have negative working capital?  151 companies have negative working capital, defined as current liabilities exceeding current assets. Does this mean that they are inherently more risky businesses? Not exactly.  In my last post, I uncovered how many large companies have negative working capital. This is because one must understand the cause of

Is negative working capital bad? No, not necessarily.  Working capital = Current Assets – Current Liabilities This past week, I was discussing the concept of working capital. At a surface level, most students realized the benefits of having positive working capital: liquidity.  Current assets are defined as any asset that can be converted to cash within one year (or within

The Basics In order to understand calendarization, we must know two basic terms: calendar year and fiscal year.  Calendar Year (CY): The standard twelve-month period that begins on January 1st and ends on December 31st of the same year. Fiscal Year (FY): A twelve-month accounting period that a business or organization chooses for financial reporting purposes. It does not necessarily align with