Question

At the beginning of the year, a firm has current assets of $313 and current liabilities of $217. At the end of the year, the current assets are $463 and the current liabilities are $257. What is the change in net working capital?

Answer 1

The change in net working capital is $110.

Step-by-step explanation:

The net working capital is calculated as the difference between the ending or year end working capital and the beginning working capital. The working capital is that portion of capital of a business that is used in every day operations of the business. The formula for working capital is:

Working capital = Current assets - Current Liabilities

Change in Net working capital = Ending working capital - Beginning working capital

Beginning working capital = 313 - 217 = $96

Ending working capital = 463 - 257 = $206

Change in net working capital = 206 - 96 = $110