Holiday Confections has the following balance sheet figures for the year ending December 31, 2018: Cash $1,000
Marketable securities 5,000
Inventory 3,000
$9,000
Accounts payable $2,000
Notes payable 1,000
$3,000
Its net working capital is:
A)$1,000
B)$3,000
C)$6,000
D)$9,000
E)cannot be calculated from the information provided

Question

Quizplus · Accepted Answer

Net working capital is calculated as current assets minus current liabilities. Here, current assets are $9,000 (Cash + Marketable securities + Inventory) and current liabilities are $3,000 (Accounts payable + Notes payable), so the net working capital is $9,000 - $3,000 = $6,000.

Holiday Confections Has the Following Balance Sheet Figures for the Year