Question

You are evaluating the balance sheet for Cypress Corporation. From the balance sheet you find the following balances:Cash and marketable securities = $610,000, Accounts receivable = $810,000, Inventory = $510,000, Accrued wages and taxes = $51,000, Accounts payable = $201,000, and Notes payable = $1,010,000. What is Cypress's net working capital?

Answer 1

Answer:

The answer is $668,000

Explanation:

Net working capital = current asset - current liability.

Under current asset, we have Cash and marketable securities($610,000) Accounts receivable($810,000) Inventory($510,000)

And under current liability, we have

Accrued wages and taxes($51,000) Accounts payable($201,000), Notes payable($1,010,000)

Current asset = $610,000+$510,000+$810,000 = $1,930,000

Current liability = $51,000+$201,000+$1,010,000=$1,262,000

Therefore, net working capital =$1,930,000 - $1,262,000

=$668,000