Typical situations where working capital needs are negative

In some economic fields such as the supermarket industry, this situation occurs: the company usually receives the sales payment before paying the supplier, because The inventory turnover rate of these products is relatively high, and the company only needs to use a small amount of funds during this period. The sooner the company sells goods to obtain cash-like financial instruments, the company's operating cycle will not only require the company to provide funds, but can generate a certain amount of cash for the company. Investing this cash will also bring certain benefits to the company. financial income.

Typical situations where working capital needs are positive

A company that has just been established and is in the growth stage will often have positive working capital needs. Since the company was established not long ago, its business reputation has not yet been fully established, so there are fewer projects to deal with. On the contrary, because the company is in the early stages of developing the market, credit sales are very common. And because the market has not been accurately grasped, it is easy to cause high inventory. All these aspects will lead to positive liquidity needs.