Wu Systems has the following balance sheet. Assume that all current assets are used in operations. How much net operating working capital does the firm have?
Cash | $ 100 | Accounts payable | $ 200 | |
Accounts receivable | 650 | Accruals | 110 | |
Inventory | 550 | Notes payable | 590 | |
Current assets | $ 1,300 | Current liabilities | $ 900 | |
Net fixed assets | $ 1,000 | Long-term debt | 600 | |
Common equity | 300 | |||
Retained earnings | 500 | |||
Total assets | $ 2,300 | Total liab. & equity | $ 2,300 |
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Net operating working capital:
= Operating current assets – Operating current liabilities
= $1,300-($200+$110)
= $1,300-$310
= $990
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Wu Systems has the following balance sheet. Assume that all current assets are used in operations....
Wu Systems has the following balance sheet. How much net operating working capital does the firm have? Cash $ 100 Accounts payable $ 200 Accounts receivable 650 Accruals 350 Inventory 550 Notes payable 350 Current assets $1,300 Current liabilities $ 900 Net fixed assets 1,000 Long-term debt 600 Common equity 300 Retained earnings 500 Total assets $2,300 Total liab. & equity $2,300 a. $750 b. $675 c. $825 d. $908 e. $998
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