Cash & Liquidity
Net Current Liability Position
Working capital position where current liabilities exceed current assets, a going concern flag.
Why working capital flags going concern
When current liabilities exceed current assets the entity has a net current liability position, a primary indicator that it may be unable to settle obligations as they fall due and therefore a going-concern concern under GRAP and the auditing standards. The accounting officer must assess and disclose going-concern risk, and oversight bodies treat a sustained negative position as a trigger for intervention. AuditPro Core tracks the working-capital position so deterioration is detected and the going-concern assessment is evidenced.
The Numbers
AuditPro Core renders this view from your tenant's live, tamper-evident records. The figures below are illustrative sample data.
Current ratio
0.78
▼ 0.11
Net current liability
R164 m
Creditors over 90 days
R96 m
Unspent grants (liability)
R72 m
Current ratio trend
Working capital composition
| Component | Value (R m) | Class |
|---|---|---|
| Cash and equivalents | 84 | Current asset |
| Consumer debtors (net) | 412 | Current asset |
| Trade creditors | 488 | Current liability |
| Unspent conditional grants | 172 | Current liability |
Figures shown are illustrative sample data for demonstration. AuditPro Core renders these views from your own tenant's live, tamper-evident records.
The working-capital test
Net current liability position arises when current liabilities exceed current assets. It signals potential difficulty meeting short-term obligations from short-term resources.
Going-concern linkage
A negative working-capital position is one of several indicators the entity may not be a going concern, requiring management to assess and, where relevant, disclose material uncertainty.
Quality of current assets
The position must be read alongside the collectability of debtors and the realisability of other current assets, since impaired receivables overstate the asset side and mask a worse position.
Trend over snapshot
A single negative position may be manageable, but a worsening trend across periods points to structural insolvency risk that demands corrective action.
How AuditPro Core Bridges the Gap
- Position calculation: current assets and liabilities are reconciled to the ledger to compute the working-capital position each period.
- Trend monitoring: the position is tracked over time so deterioration, not just a single shortfall, is surfaced.
- Quality adjustment: debtor collectability and asset realisability are factored in so the position is not flattered by impaired balances.
- Audit-ready evidence: the working-capital analysis exports to support the going-concern assessment and disclosure.
Key Takeaways
- Current liabilities exceeding current assets is a going-concern indicator.
- Read the position alongside debtor collectability and asset realisability.
- A worsening trend signals structural insolvency risk, not a one-off.
- Use the analysis to evidence the going-concern assessment and disclosure.
See This on Your Own Data
AuditPro Core renders this dashboard from your tenant's live, tamper-evident records — every figure traceable to source.