Team Sports Industries has a cash balance of $60,000; accounts payable of $40,000; inventory of $100,000; accounts receivable of $110,000; notes payable of $80,000; and accrued wages and taxes of $10,000. How much net working capital does the firm need to fund?

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Quizplus · Accepted Answer

Net working capital = Current assets - Current liabilitiesCurrent assets = Cash + Accounts receivable + Inventory = $60,000 + $110,000 + $100,000 = $270,000Current liabilities = Accounts payable + Notes payable + Accrued wages and taxes = $40,000 + $80,000 + $10,000 = $130,000Net working capital = $270,000 - $130,000 = $140,000

Team Sports Industries Has a Cash Balance of $60,000; Accounts