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A firm’s 2016 balance sheet showed current assets of $1,700 and current liabilities of $800. Its...

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Finance

A firm’s 2016 balance sheet showed current assets of$1,700 and current liabilities of $800. Its 2017 balance sheetshowed current assets of $2,500 and current liabilities of $4,000.What was the firm’s 2017 increase in net workingcapital?

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3.7 Ratings (585 Votes)

Net working capital = Current assets - Current liabilities
Net working capital of 2017:
Current assets $         2,500
Current liabilities $         4,000
Net Working Capital $       -1,500
Net working capital of 2016:
Current assets $         1,700
Current liabilities $            800
Net Working Capital $            900
Firm's 2017 increase in net working capital = Net working capital in 2017 - Net working capital in 2016
= $   -1,500 - $        900
= $   -2,400

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A firm’s 2016 balance sheet showed current assets of$1,700 and current liabilities of $800. Its 2017 balance sheetshowed current assets of $2,500 and current liabilities of $4,000.What was the firm’s 2017 increase in net workingcapital?

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