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Balance sheet 2010 2011 2010 2011 Cash 4,600 3,800 Accounts payable 16,200 17,100 Accounts receivable 10,200...

Balance sheet
2010 2011 2010 2011
Cash 4,600 3,800 Accounts payable 16,200 17,100
Accounts receivable 10,200 9,700 Long-term debt 36,000 33,400
Inventory 18,900 20,300 Common stock 14,000 20,000
Net fixed asset 41,400 42,100 Retained earning 8,900 5,400
Total asset 75,100 75,900 Total claim 75,100 75,900
Income statement 2011
Net sales 61,600
Cost 48,900
Depreciation 7,800
EBIT 4,900
Interest 2,500
EBT 2,400
Taxes 800
Net income 1,600

What is the amount of the change in net working capital using the above financial statements ?

Solutions

Expert Solution

Answer:

Net Working capital = Current Assets - Current Liabilities

Calculation of Current Assets

Current Assets for 2010 = Cash + Inventory +Accounts Receivable = 4,600 + 18,900 + 10,200

Current Assets for 2010 = 33,700

Current Assets for 2011 = Cash + Inventory +Accounts Receivable = 3,800 + 20,300 + 9,700

Current Assets for 2011 = 33,800

Calculation of Current Liabilities

Current Liabilities for 2010 = Accounts Payable = 16,200

Current Liabilities for 2011 = Accounts Payable = 17,100

Calculation of Net Working Capital

Net Working Capital for 2010 = Current Assets for 2010 - Current Liabilities for 2010 = 33,700 - 16,200 = 17,500

Net Working Capital for 2011 = Current Assets for 2011 - Current Liabilities for 2011 = 33,800 - 17,100 = 16,700

Calculation of Change in Net Working Capital

Change in Net Working Capital = Net Working Capital for 2011 - Net Working Capital for 2010

= 16,700 - 17,500 = -800

Change in net working capital in amount is -800

jeff jeffy answered 1 year ago
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