If a company's current assets total $100,000 and its total liabilities are $50,000, what is its net working capital?

Study for the Louisiana Contractor Business and Law Exam. Delve into flashcards and multiple choice questions, with hints and explanations for each. Prepare confidently for success!

Net working capital is calculated as the difference between a company's current assets and its total liabilities. In this case, current assets are given as $100,000, and total liabilities are $50,000.

To determine the net working capital, you subtract total liabilities from current assets:

Net Working Capital = Current Assets - Total Liabilities

Net Working Capital = $100,000 - $50,000

Net Working Capital = $50,000

This figure indicates the liquidity available to the company for its day-to-day operations, showing how much current assets exceed current liabilities. This positive net working capital implies that the company has sufficient resources to cover its short-term obligations. The other choices do not reflect the correct computation based on the provided figures of assets and liabilities, thus validating the conclusion that $50,000 is indeed the correct net working capital.

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