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15 September, 05:10

Calculating additions to NWC. The December 31, 2013, balance sheet of Maria's Tennis Shop, Inc. showed current assets of $1,045 and current liabilities of $960. The December 31, 2014 balance sheet showed current assets of $1,310 and current liabilities of $1,090. What was the company's 2014 change in net working capital, or NWC?

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  1. 15 September, 07:37
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    The company's 2014 change in net working capital, or NWC is $135

    Explanation:

    The formula should be used to compute the changes in the net working capital which is shown below:

    = (Net Working Capital 2014 - Net working capital 2013)

    where,

    Net working capital = Current assets - Current liabilities

    = (Currents Assets 2014 - Current Liabilities 2014) - (Currents Assets 2013 - Current Liabilities 2013)

    = ($1,310 - $1,090) - ($1,045 - $960)

    = $220 - $85

    = $135

    Hence, the company's 2014 change in net working capital, or NWC is $135
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