Question

The Caraway Seed Company grows heirloom tomatoes and sells their seeds. The heirloom tomato plants are preferred by many growers for their superior flavor. At the end of the most recent year the firm had current assets of $50,400​, net fixed assets of $248,500​, current liabilities of $30,800​, and​ long-term debt of $99,100.

a.  Calculate​ Caraway's stockholders' equity.

b. What is the​ firm's net working​ capital?

c.  If​ Caraway's current liabilities consist of $20,100 in accounts payable and $10,700 in​ short-term debt​ (notes payable), what is the​ firm's net working​ capital?

Answer 1

a. Stockholder's Equity = Current Assets + Net Fixed assets - Current Liabilities - Long term debt

= 50,400 + 248,500 - 30,800 - 99100

= $169,000

b. Net Working capital = Current Assets - Current Liabilities

= 50,400 - 30,800

= $19,600

c. Net operating working capital = Current Assets - Accounts payable

= 50,400 - 20,100

= $30,300