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As it was not your assertion [originally] I have no problem with your logic.

However, Working Capital, almost by definition, is not excess cash
Quite the reverse, Working Capital is the prudent level of liquidity required to ensure that bankruptcy does not ensue due to an inability to fund current liabilities.

Working Capital consists of;
*Cash & liquid instruments [bills]
*Receivables
*Inventory [all 3 components]
*Prepaid expenses
*Other

The financial ratio of a minimum of 2.0 has been accepted as the standard for some 100yrs+
Note that 50+ mortgage lenders, 10+ Hedge Funds have all gone bankrupt in the last 6 weeks due to a lack of liquidity [working capital]

So, what reasons are you advancing [original poster] to the revision of this standard?

Or was the comment simply "off-the-top of your head, and simply opinion?

jog on
d998

<blockquote data-quote="ducati916" data-source="post: 197504" data-attributes="member: 2975">As it was not your assertion [originally] I have no problem with your logic.However, Working Capital, almost by definition, is not excess cashQuite the reverse, Working Capital is the prudent level of liquidity required to ensure that bankruptcy does not ensue due to an inability to fund current liabilities.Working Capital consists of;*Cash &amp; liquid instruments [bills]*Receivables*Inventory [all 3 components]*Prepaid expenses*OtherThe financial ratio of a minimum of 2.0 has been accepted as the standard for some 100yrs+Note that 50+ mortgage lenders, 10+ Hedge Funds have all gone bankrupt in the last 6 weeks due to a lack of liquidity [working capital]So, what reasons are you advancing [original poster] to the revision of this standard?Or was the comment simply &quot;off-the-top of your head, and simply opinion?jog ond998</blockquote>

[QUOTE="ducati916, post: 197504, member: 2975"] As it was not your assertion [originally] I have no problem with your logic. However, Working Capital, almost by definition, is not [B]excess cash[/B] Quite the reverse, Working Capital is the prudent level of liquidity required to ensure that bankruptcy does not ensue due to an inability to fund current liabilities. [B]Working Capital[/B] consists of; *Cash & liquid instruments [bills] *Receivables *Inventory [all 3 components] *Prepaid expenses *Other The financial ratio of a minimum of 2.0 has been accepted as the standard for some 100yrs+ Note that 50+ mortgage lenders, 10+ Hedge Funds have all gone bankrupt in the last 6 weeks due to a lack of liquidity [working capital] So, what reasons are you advancing [original poster] to the revision of this standard? Or was the comment simply "off-the-top of your head, and simply opinion? jog on d998 [/QUOTE]

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