Question

1. calculate the NWC of Tesco Co which has 10000 in its bank account, short term receivables from its customers in the amount of 5000 has to pay 7500 to its suppliers in accounts payables, inventory amounting to 5000 in the warehouse, accrued expenses from previous period in the amount of 2500 ( tesco has to pay it now), other trade debt of 5600 and the company has 10000 in cash

Answer 1

1. Net working capital = Current Assets - Current Liabilities

Current Assets are assets that can be converted to cash with in the next one year period. Current assets include cash, bank balance, cash equivalents, stock inventory, accounts receivable, marketable securities, pre-paid liabilities, and other liquid assets.

Current liabilities are a company's short-term financial obligations that are due within one year. Current liabilities include accounts payable, short-term debt, dividends, and notes payable as well as income taxes owed.

In the question

Current Asset	Amount
Bank Balance	10000
Cash	10000
Receivables	5000
Inventory	5000
Total Current Assets	30000
Current Liabilities
Payables	7500
Accrued Expenses	2500
Trade Debt	5600
Total Current Liabilities	15600
Net Working Capital	14400

The Net Working Capital is 14400