Question

You are evaluating the balance sheet for Campus Corporation. From the balance sheet you find the following balances: Cash and marketable securities = $800,000, Accounts receivable = $200,000, Inventory = $100,000, Accrued wages and taxes = $10,000, Accounts payable = $280,000, and short-term notes payable = $600,000. What is Campus's net working capital?

Answer 1

Net Working Capital are $120,000

Step-by-step explanation:

As we know:

Net Working Capital = Current Assets - Current Liabilities

Here current assets are:

1. Cash and marketable securities
2. Accounts Receivable
3. Inventory

And Current Liabilities are:

1. Accrued wages and taxes
2. Accounts payable
3. Short-term notes payable

So by putting values in the above equation, we have:

Net Working Capital = ($800,000 + $200,000 + $100,000) - ($10,000 + $280,000 + $600,000) = $1,100,000 - $890,000 = $120,000