At the beginning of the year, a firm had current assets of $121,306 and current liabilities of $124,509. At the end of the year, the current assets were $122,418 and the current liabilities were $103,718. What is the change in net working capital?

Question

Business

Richards

21 February, 10:57

At the beginning of the year, a firm had current assets of $121,306 and current liabilities of $124,509. At the end of the year, the current assets were $122,418 and the current liabilities were $103,718. What is the change in net working capital?

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Answers (1)

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Krause · Answer 1

change in net working capital = $21,903

Explanation:

given data

beginning current assets = $121,306

beginning current liabilities = $124,509

end of the year current assets = $122,418

end of the year current liabilities = $103,718

solution

we get here working capital at beginning that is express as

working capital = Current assets - current liabilities ... 1

put here value we get

working capital = $121,306 - $124,509

working capital = - $3203

and now we get here working capital for end of year that is

working capital = Current assets - current liabilities ... 2

working capital = $122,418 - $103,718

working capital = $18,700

so now we can get change in net working capital that is difference between beginning and ending working capital

change in net working capital = $18,700 - (-$3,203)

change in net working capital = $21,903