Baron,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 can be calculated using the formula:

Net working capital = Total current assets - Total current liabilities

In this case, the total current assets are $1,200,000 and the total current liabilities are $500,000. Therefore,

Net working capital = $1,200,000 - $500,000 = $700,000

Thus, the correct answer is option D, which is $700,000.

Baron,IncHas Total Current Assets of $1,200,000; Long-Term Debt of $600,000;