Universal Financial,Inc.has total current assets of $1,200,000; long-term debt of $600,000; total current liabilities of $500,000; and long-term assets of $800,000.How much is the firm's net working capital?
A) $1,000,000
B) $900,000
C) $600,000
D) $700,000

Question

Quizplus · Accepted Answer

Net working capital is calculated by subtracting current liabilities from current assets. 
Net working capital = current assets - current liabilities
= $1,200,000 - $500,000
= $700,000. 
Therefore, the correct option is D, $700,000.