Saskatchewan Corporation has the following balance sheet.How much net operating working capital does the firm have? $\begin{array}{lrlr}
\text { Cash } & \$ 20 & \text { Accounts payable } & \$ 40 \
\text { Short-term investments } & 30 & \text { Accruals } & 20 \
\text { Accounts receivable } & 70 & \text { Notes payable } & 60 \
\text { Inventory } & 40 & \text { Current liabilities } & \$ 120 \
\text { Current assets } & \$ 160 & \text { Long-term debt } & 0 \
\text { Net fixed assets } & \underline{100} & \text { Common equity } & 90 \
\text { Retained earnings } & 50 & & \
\text { Total assets } & \$ 260 & \text { Total liab. \& equity } & \$ 260
\end{array}$

Question

Saskatchewan Corporation has the following balance sheet.How much net operating working capital does the firm have?​ $\begin{array}{lrlr}
\text { Cash } & \$ 20 & \text { Accounts payable } & \$ 40 \
\text { Short-term investments } & 30 & \text { Accruals } & 20 \
\text { Accounts receivable } & 70 & \text { Notes payable } & 60 \
\text { Inventory } & 40 & \text { Current liabilities } & \$ 120 \
\text { Current assets } & \$ 160 & \text { Long-term debt } & 0 \
\text { Net fixed assets } & \underline{100} & \text { Common equity } & 90 \
\text { Retained earnings } & 50 & & \
\text { Total assets } & \$ 260 & \text { Total liab. \& equity } &  \$ 260
\end{array}$ ​

Quizplus · Accepted Answer

Net operating working capital (NOWC) is calculated as current assets minus non-interest-bearing current liabilities. 
Current assets = 160 
Non-interest-bearing current liabilities = Accounts payable + Accruals = 40 + 20 = 60 
NOWC = Current assets - Non-interest-bearing current liabilities = 160 - 60 = $100.
Therefore, the correct choice is B.

Saskatchewan Corporation Has the Following Balance Sheet ​ A)$75 B)$70 C)$130 D)$70

Saskatchewan Corporation Has the Following Balance Sheet
A)$75
B)$70
C)$130
D)$70