Build the net working capital

Exercise and reference answers

Start

Item

Current assets

Value

1000000

Steps

1. Operation

   sub

   Item

   Less accounts payable

   Value

   500000

2. Operation

   sub

   Item

   Less other current debts

   Value

   250000

Other choices

1. Explanation

   Long-term debt is not a current liability, so it stays out.

   Item

   Less long-term debt

2. Explanation

   Revenue is not a balance sheet item and does not belong here.

   Item

   Add the annual revenue

Instructions

Tap the steps in order to build the total. Wrong taps explain themselves.

Result

Net working capital

Explanation