Interested to Buy Any Domain ? << Click Here >> for more details...
Answer Posted / rkesh kumar singh
How to Calculate Working Capital
1. Begin by determining current assets. Current assets are
comprised of cash, marketable securities, accounts
receivable and current inventory. Sum the total value of
each of the above to arrive at the current assets
2. Determine current liabilities. Current liabilities
include accounts payable, accrued expenses, notes payable
and the portion of long-term debt that is classified as
current. Sum all of these accounts to arrive at the current
liabilities figure.
3. Take the total of the current assets and subtract them
from the current assets. The result will be the working
capital. In other words, current assets minus current
liabilities equals working capital.
4. Look at the following example: The company has $100,000
in cash, $50,000 in securities, $10,000 in account
receivable, and $30,000 in inventory. On the current
liabilities side, the company has $60,000 in accounts
payable, $10,000 in accrued expenses, and $20,000 in current
debt. The current assets are $100, 000 + $50,000 + $10,000 +
$30,000 or $190,000.The current liabilities are $60,000 +
$10,000 + $20,000 or $90,000.Take the current assets of
$190,000 and subtract the current liabilities of $90,000 to
arrive at the working capital of $100,000.$190,000 - $90,000
= $100,000.
| Is This Answer Correct ? | 11 Yes | 0 No |
Post New Answer View All Answers
what is accounting cycle ?
Tell us what do you believe should be an important quality of an account executive?
What are the rules for debit and credit for different accounts to increase the amount in your business accounts?
What can go wrong if you have a balance sheet with a lot of debt? What can go wrong if there is negative owner's equity? What does a good cash flow statement look like and why?
Tell me do you possess any knowledge about accounting standards?
How to prepare HSD statements in tally
What are the features of financial accounting?
Sales Invoice 50000/- fully profit , management want profit for this year should be appear in P&L A/c and B/S 25000/- only and remaining 25000/- profit retain for the next year What will be JV for this year and next year?- Thank you
What is accrual accounting?
journal entry for prepaid insurance and salary outstanding
how will decide that vender payment is ok without reco
Describe a time when you have not met your goal?
When a merchant sales of goods included/charged on packaging charges ,cartages and insurance;i.E :-Indirect income/revenue income and indirect expense/revenue expenditure. Plz suggeste me correct answer.Through messages,mail .
what do you mean by Firm
The following are the list of Balances of SUNSHINE Company as at 1.2.2012 RM Land and building 450,000. Furniture and Fittings 35,000. Office Equipment 25,000. Motor Vehicles 75,000. Inventory 5,000. Trade Receivables 12,000. Trade Payables 8,000. Bank Loan 200,000. Bank 13,000. Cash in Hand 1,000. Capital 408,000.
