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Hammond's net working capital in 2020 is closest to: A) $2.3 million B) $3.8 million C) $6.5 million D) $10.5 million

Hammond's net working capital in 2020 is closest to: A) $2.3 million B) $3.8 million C) $6.5 million D) $10.5 million

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Hammond Motors had sales of $35 million in 2020 with a cost of goods sold of $20 million. A simplified balance sheet for Hammond appears below attached: 

23) Hammond's net working capital in 2020 is closest to:

  1. A) $2.3 million
  2. B) $3.8 million
  3. C) $6.5 million
  4. D) $10.5 million

Justify your answer 

 

Assets Liabilities and Equity Accounts payable Notes payable Cash 1,600 1,800 Accounts receivable 4,200 3,200 Inventory 3,000 Accruals 1,500 Total current assts 8,800 Total current liabilities 6,500 4,000 10,500 Long-term Debt Net Plant, property and equipment 8,200 Total liabilities Common equity Total liabilities and equity 6,500 Total Assets 17,000 17,000 amounts is $ Thousands
Transcribed Image Text:Assets Liabilities and Equity Accounts payable Notes payable Cash 1,600 1,800 Accounts receivable 4,200 3,200 Inventory 3,000 Accruals 1,500 Total current assts 8,800 Total current liabilities 6,500 4,000 10,500 Long-term Debt Net Plant, property and equipment 8,200 Total liabilities Common equity Total liabilities and equity 6,500 Total Assets 17,000 17,000 amounts is $ Thousands
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