At the beginning of the year, a firm has current assets of $91,807 and current liabilities of $102,343. At the end of the year, the current assets are $89,476 and the current liabilities are $92,638. What is the change in net working capital?

Question

Quizplus · Accepted Answer

Net working capital is calculated as current assets minus current liabilities. At the beginning of the year, the net working capital was $91,807 - $102,343 = -$10,536. At the end of the year, it was $89,476 - $92,638 = -$3,162. The change in net working capital is -$3,162 - (-$10,536) = $7,374.

At the Beginning of the Year, a Firm Has Current