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WHat is the formula to find net working capital if it is not given? What information...

WHat is the formula to find net working capital if it is not given? What information do I require?

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Answer #1


I will share three types of formula which are just expansion of each other it would give net working capital:

1.

Net working capital = Current Assets - Current Liabilities

(general)

2.

Net working capital = Current Assets – Current Liabilities

Current assets = Debtors + Account receivable + Stocks + Cash

Current assets = Creditors + Account payable + Accrued liabilities

(general)

3.

Net working capital = Total non-current assets – Equity - Reserves & surplus - Long term debt

This formula applies when we don’t have numbers for current assets or current liabilities or both

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