Suppose you have the beginning and ending year statement of financial positions of Samco, a steel company based in Hamilton, along with the year's statement of comprehensive income. Changes in net working capital (NWC) would be calculated as:
A) Ending NWC plus depreciation minus beginning NWC.
B) Ending NWC minus depreciation minus beginning NWC.
C) Ending NWC plus taxes paid plus beginning NWC.
D) Ending NWC minus beginning NWC.
E) Ending NWC plus beginning NWC.

Question

Quizplus · Accepted Answer

Changes in net working capital (NWC) are calculated by subtracting the beginning NWC from the ending NWC. This calculation does not include depreciation or taxes paid, as these are not components of working capital.

Suppose You Have the Beginning and Ending Year Statement of Financial