Yes @ashit. You are right on money. But the book definition of working capital can not be employed here as that needs the data under the heads of Current assets and Current liabilities. I have slightly modified the concept to use the existing data and consider this concept as an important area to focus as an investor…
Here you go:
Insight3: If the trend of R+I-P (Receivables+Inventory-Trade Payables) for a business is toward a negative value, business could be a good candidate to explore further.
In nutshell, it seems to be a good business due to the presence of investments and surplus Cash, absence of debt and Negative Working Capital.
Question 1: Is the business fixed capital intensive as the 54.1 % (47% +7.1%) of the assets are tied up in Long term/Fixed assets?
–Need to look at total sales from Income statement to calculate the Fixed Asset Turnover.
Question 2:What are the investments that the company is holding?
–Need to look at the respective accounting note in the Annual Report(AR).
P.S: Inspired and Influenced by the various articles that are written by Prof. Sanjay Bakshi on this topic.