Calculate beginning net working capital given the following information: cash flow from assets = $24,500; operating cash flow = $8,500; capital spending = ($14,000); ending net working capital = $8,000.

Question

Quizplus · Accepted Answer

To find the beginning net working capital, use the formula: Cash Flow from Assets = Operating Cash Flow - Change in Net Working Capital - Capital Spending. Rearrange to find the change in net working capital: Change in NWC = Operating Cash Flow - Capital Spending - Cash Flow from Assets. Substitute the values: Change in NWC = $8,500 - (-$14,000) - $24,500 = -$2,000. Since ending NWC is $8,000, beginning NWC = Ending NWC - Change in NWC = $8,000 - (-$2,000) = $10,000.

Calculate Beginning Net Working Capital Given the Following Information: Cash