Negative Working Capital

Negative Working Capital

Negative Working Capital

Negative Working Capital

What are Negative Working Capital Stocks?

Negative working capital stocks are companies where current liabilities weigh more than current assets. Such companies rely on quick cash turnover, using money from sales to fund operations rather than holding large cash reserves. These companies provide growth for investors but also come with financial risk if the company struggles to meet short-term obligations. Investors should assess these stocks carefully before investing.

What do Negative Working Capital Midcap Stocks Tell Us?

Negative working capital midcap stocks indicate that a company's current liabilities are higher than its current assets. This can suggest efficient business operations, where the company quickly collects payments and delays expenses. However, it may also signal financial stress if the company struggles to manage its short-term obligations. It's essential to assess each company's context carefully.

Filters Used to Sort the Above Stocks

1. Working Capital <= 0

Working capital filter highlights companies with low or negative working capital, meaning their short-term liabilities exceed their current assets. This might indicate that the company is managing its cash flow efficiently, especially if it operates on tight cash cycles. We use this filter to identify midcap companies that may not rely heavily on excess working capital, often common in industries with rapid inventory turnover or service-based businesses.

2. 3Y Revenue Growth >= 0.00

This filter selects midcap stocks that have shown consistent or positive revenue growth over the past three years. Even minimal positive growth suggests that the company is stable and has been able to maintain or increase its revenue during this period. We use this filter to spot midcap companies with steady growth potential, offering insight into their financial health and ability to expand in the future.

Key Takeaways

1. Liquidity Risks

Negative working capital indicates a company's current liabilities exceed its current assets, suggesting potential liquidity challenges. Investors should assess the company's cash flow to gauge its ability to meet short-term obligations.

2. Operational Efficiency Insight

Companies with negative working capital may rely on efficient inventory management and quick receivables collection. This can signal operational efficiency but requires careful evaluation of sustainability and market conditions.

3. Sector Considerations

Negative working capital can be common in certain sectors, like retail or technology. Investors should consider industry norms when analyzing these stocks, as some sectors may operate effectively despite this financial metric.

4. Potential for Growth

While negative working capital raises red flags, it may also indicate aggressive growth strategies. Investors should investigate the company's growth plans and market positioning to determine the potential long-term impact on financial health.

5. Monitoring Financial Health

Continuous monitoring of financial statements is essential for assessing companies with negative working capital. Investors should track changes in liabilities and assets to understand evolving risks and financial stability.

Negative working capital stocks highlight companies where current liabilities exceed current assets. This means the business relies on short-term liabilities to fund its operations. While it can indicate efficient management of cash flow, it may also signal financial risk if the company struggles to cover its short-term obligations.

Working Capital
0

Revenue Growth (3 Year)
0.00

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Price
Day Price Change
Price %Change
Volume
PE Ratio
Market Cap
1,911.20 -5.60 -0.29% 92,50,439 20.72 14,62,435
1,817.20 -28.40 -1.54% 45,70,083 54.16 10,36,187
1,404.80 2.10 0.15% 1,17,05,093 19.57 9,92,620
9,112.00 -189.00 -2.03% 10,89,354 36.15 5,64,833
2,204.40 -18.60 -0.84% 21,36,003 22.49 4,38,284
11,698.00 -196.00 -1.65% 9,06,266 25.73 3,67,788
12,237.00 78.00 0.64% 4,12,558 57.16 3,60,597
356.45 -6.75 -1.86% 97,85,640 16.01 3,45,638
2,045.50 -59.50 -2.83% 19,60,343 39.21 3,26,597
246.33 -3.04 -1.22% 1,56,16,265 7.78 3,09,890
306.50 -7.90 -2.51% 1,14,75,773 18.81 2,85,064
2,354.30 -88.20 -3.61% 14,14,809 71.92 2,71,729
1,028.40 -16.10 -1.54% 27,84,217 72.31 2,51,490
655.25 -13.10 -1.96% 1,32,07,043 7.73 2,41,210
2,413.50 -19.70 -0.81% 11,28,284 76.45 2,32,699
134.65 -3.74 -2.70% 1,46,63,542 21.76 1,90,142
2,734.80 5.60 0.21% 6,49,356 43.35 1,86,086
413.30 -6.95 -1.65% 1,12,05,671 14.14 1,61,616
704.55 -3.85 -0.54% 37,14,671 84.21 1,51,682
912.55 -56.40 -5.82% 68,24,718 99.04 1,44,551
415.05 -19.15 -4.41% 87,82,826 6.43 1,36,971
1,543.50 -4.40 -0.28% 17,77,628 32.05 1,30,166
1,266.50 -1.40 -0.11% 14,85,280 75.14 1,29,564
295.70 -6.30 -2.09% 77,73,037 9.35 1,28,290
387.60 -8.25 -2.08% 1,42,33,760 32.59 1,23,851