A firm reports the following balance sheet items: total current liabilities of $535,000; total assets of $2,500,000; fixed and other assets of $1,850,000; and long-term debt of $200,000.What is the amount of the firm's net working capital?
A)$115,000
B)$450,000
C)$335,000
D)$1,315,000

Question

Quizplus · Accepted Answer

Net working capital is calculated as current assets minus current liabilities. From the information given, total assets are $2,500,000, of which fixed and other assets are $1,850,000. Therefore, current assets are $2,500,000 - $1,850,000 = $650,000. Subtracting the current liabilities of $535,000 from the current assets of $650,000 gives a net working capital of $115,000.

A Firm Reports the Following Balance Sheet Items: Total Current