All else constant, which of the following would decrease net working capital?

Question

Quizplus · Accepted Answer

Net working capital is calculated as current assets minus current liabilities. An increase in accounts payable (a current liability) would decrease net working capital, as it means the company owes more in the short term. Increases in inventory or payments to accounts receivable affect current assets, not current liabilities, and would not decrease net working capital in the manner described.

All Else Constant, Which of the Following Would Decrease Net