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In: Economics

Calculate the amount of the change in net working capital given the following information: The company...

Calculate the amount of the change in net working capital given the following information: The company had current assets of $77,000 and current liabilities of $88,000. One year later, the current assets are $99,000 and the current liabilities are $91,000. The depreciation for the period is $8,800 and the interest paid is $7,700.

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Expert Solution

Solution:-

Last Year net working capital = Current Assets - Current Liabilities

                                               = $77,000 - $88,000

                                               = -$11,000

Current Year net working capital = Current Assets - Current Liabilities

                                                    = $99,000 - $91,000

                                                    = $8,000

Change in Net Working Capital = Current Year Net Working Capital - Last Year Net Working Capital

                                                  = $8,000 - (-$11000)

                                                  = $19,000

Rahul Sunny answered 1 year ago
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