The 2020 balance sheet of Dugan, Incorporated, showed current assets of $3,135 and current liabilities of $1,545. The 2021 balance sheet showed current assets of $3,100 and current liabilities of $1,545. What was the company's 2021 change in net working capital, or NWC?
The 2020 balance sheet of Dugan, Incorporated, showed current assets of $3,135 and current liabilities of $1,545. The 2021 balance sheet showed current assets of $3,100 and current liabilities of $1,545. What was the company's 2021 change in net working capital, or NWC?
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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The 2020 balance sheet of Dugan, Incorporated, showed current assets of $3,135 and current liabilities of $1,545. The 2021 balance sheet showed current assets of $3,100 and current liabilities of $1,545. What was the company's 2021 change in net working capital, or NWC? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations.)
| Change in NWC | $ |
Expert Solution
Step 1
Working Capital can be defined as the required capital for the day-to-day operations of the firm. This can be calculated using the formula below:
Working Capital = Current Assets - Current Liabilities.
Change in working capital is the difference between the working capital in the 2 years.
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