Question

Last year CurrAssets=$1,165 and CurrLiab=$945. This year CurrAssets=$1,380 and CurrLiab=$1,055. Required: What was the increase in...

Last year CurrAssets=$1,165 and CurrLiab=$945. This year CurrAssets=$1,380 and CurrLiab=$1,055.


Required:

What was the increase in net working capital this year?


  Increase in net working capital   $    
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Answer #1

Last year's net working capital:

Formula for calculating the net working capital:

Net Working Capital= Current Assets- Current Liabilities

  = $1,165 - $945

= $220

This year's net working capital:

Formula for calculating the net working capital:

Net Working Capital= Current Assets- Current Liabilities

  = $1,380 - $1,055

= $325

Therefore, increase in net working capital this year:

= $325 - $220

= $105.

In case of any query, kindly comment on the solution.

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