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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Question
Poseidon, Inc., has current assets of $2,820, net fixed assets of $13,750, current liabilities of $4,525, and long-term debt of $5,130.
How much is the company's net working capital?
(Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
Expert Solution

INTRODUCTION
Working capital is the amount of capital invested in the business fr carrying out day-to-day operations of the business.
working capital can be classified into 2 types:
(a) gross working capital: total amount invested in current assets is called gross working capital.
(b) net working capital: current assets minus current liabilities is called net working capital.
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