Venus Limited has current assets of $50 million, current liabilities of $30 million, inventory of $20 million, cash of $5 million and total assets of $200 million. Calculate net working capital.

Question

BlackTom AI · Accepted Answer

To determine net working capital, start by identifying the components involved: net working capital = current assets minus current liabilities.
Current assets are given as 50 million dollars, and current liabilities are 30 million dollars. Subtracting the liabilities from the assets yields 50 million – 30 million = 20 million.
The inventory and cash figures are elements of the current assets, so they’re already encompassed within the 50 million current assets total. The total assets figure (200 million) is not used in calculating net working capital, since NWC focuses strictly on the short-term liquidity balance between what the company owns in the near term and what it owes in the near term.
Therefore, the calculated net working capital is 20 million dollars, which corresponds to the provided option.

25400 Financial Literacy - Spring 2025 🔴 Practice Questions for In-class Quiz 2

Venus Limited has current assets of $50 million, current liabilities of $30 million, inventory of $20 million, cash of $5 million and total assets of $200 million. Calculate net working capital.

View Explanation

Log in for full answers

Similar Questions

Current asset=160, current libility=100, what is the working capital?

Current asset=160, current libility=100, what is the working capital?

Net working capital is defined as …………

Which of the following is NOT part of working capital?

Andjelkovic-Stewart Limited Company borrows $1 million short-term, $10,000 long-term and invests these proceeds in inventory. Which of the following statement is TRUE?[Fill in the blank]

Andjelkovic-Stewart Limited Company borrows $1 million short-term, $10,000 long-term and invests these proceeds in inventory. Which of the following statement is TRUE?[Fill in the blank]

Net working capital is defined as …………

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler