Question

ABC Inc had current assets of $67,200 and current liabilities of $71,100 last year. This year, the current assets are $83,100 and the current liabilities are $85,100. The depreciation expense for the past year is $9,600 and the interest paid is $8,700. What is the amount of the change in net working capital?

		$1,900
		$2,800
		$1,400
		$2,100
		−$1,400

Answer 1

Solution:
	Answer is 1st option $1,900
Working Notes:
Notes:	Working capital is the difference of current assets and current liabilities , which is computed to know how much is capital is invested in current assets over current liabilities or net investment required in net current assets over current liabilities for particular operations or business.
	Change in net working capital is computed to know how much additional amount is invested in net working capital or excess net working capital is recovered from the operation or business which are excess than required.
	Change in net working capital = Net working capital this year - Net working capital last year
	Change in net working capital = (CA this year - CL this year) - (CA Last year - CL Last year)
	Change in net working capital =($83100 - 85100) - ($67200 - 71100)
	Change in net working capital = (-2,000) - (-3,900)
	Change in net working capital = 1900
Notes:	Net Working Capital = Current Assets - Current Liabilities
Please feel free to ask if anything about above solution in comment section of the question.