Question

A company has the following balance sheet. What is its net operating working capital? Cash $ 10 Accounts payable $ 30 Short-term investments 30 Accruals 10 Accounts receivable 50 Notes payable 50 Inventory 40 Current liabilities 90 Current assets 130 Long-term debt 60 Net fixed assets 100 Common equity 30 Retained earnings 50 Total assets $230 Total liab. & equity $230 Select one: a. $130 b. $100 c. $40 d. $60 e. $230

Answer 1

Answer:

d. $60

Explanation:

operating assets - operating liabilities = net operating working capital

First:

cash 10

ar 50

inventory 40

operating assets 100

Then:

account payable 30

accruals 10

operating liabilities 40

Calculate:

operating assets 100 - operating liabilities 40 = net operating working capital

net operating working capital = 60