Do you agree that working capital is the long term investment in Operating Current Assets?

Answer 1(d) The Working Capital represents the investment of current assets, which have been financed by long term funds (either equity or long term debt). The rationale for financing a part of the current assets with long term finance is that a part of the current assets remains in stock throughout the life of the business. The core working capital, though made up of items which are rotated constantly, is maintained by the business on a long term basis. So, working capital is the long term investment in operating current assets. Even though the working capital reflects a margin of safety, an excessive amount of working capital would imply an inefficient use of the resources; say by means of accumulation of inventory and / or overdue receivables and/or idle cash etc, it is in this context that turnover of working capital gains significance.