If one expects, competition to pick up, expect better terms in future, ie longer receivables turnover. Creditors Creditors would depend on credit enjoyed mainly from raw materials suppliers. Working capital can also include non-trade current assets and liabilities, which gets camouflaged in loans and advances. In general, it is difficult to estimate loans and advances as they are discretionary in nature. The write down policy is highlighted in notes to accounts.
Some times there is a loss which is carried forward in the balance sheet.
It appears as a debit balance on the asset side. In reality it is a negative reserve and hence networth should be reduced by the amount carried forward in the profit and loss account. Many a time, expenditure may be of a revenue type but the benefits would accrue to the company over a longer period of time. For instance, an FMCG company can incur significant expenditure towards launching a new product. Typically the expenditure in the first year is far greater than the turnover from the product itself.