Calculate the net working capital from the following:
|
Work in progress |
- |
₹10,000 |
|
Short term borrowing |
- |
₹6,000 |
|
Accounts receivable |
- |
₹5,400 |
|
Outstanding expenses |
- |
₹2,600 |
|
Cash-in-hand |
- |
₹2,200 |
|
Long term investment |
- |
₹45,000 |
Answer & explanation
Correct answer: option 3
o calculate the net working capital, we need to subtract the current liabilities from the current assets.
Current liabilities = Short term borrowing + Outstanding expenses = ₹6,000 + ₹2,600 = ₹8,600
Current assets = Work in progress + Accounts receivable + Cash-in-hand = ₹10,000 + ₹5,400 + ₹2,200 = ₹17,600
Net working capital = Current assets - Current liabilities = ₹17,600 - ₹8,600 = ₹9,000
Therefore, the net working capital is ₹9,000.