Question

The December 31, 2018, balance sheet of Justin’s Golf Shop, Inc., showed current assets of $1,085 and current liabilities of $905. The December 31, 2019, balance sheet showed current assets of $1,300 and current liabilities of $975. What was the company's 2019 change in net working capital, or NWC?

Answer 1

$145

Step-by-step explanation:

The computation of change in net working capital is shown below:

Change in net working capital

= (Current assets in year 2019 - current assets in year 2018) - (Current liabilities in year 2019 - current liabilities in year 2019)

= ($1,300 - $1,085) - ($975 - $905)

= $215 - $70

= $145

We simply taken the difference of current assets and the current liabilities and then subtract it with each other