Question

The same hospital has $40 million in current assets and $30 million in current liabilities. During a 30 - day month, it incurred total operating expenses of $10 million. How many days of working capital did it maintain this period

Answer 1

Answer:

$Days\ of\ working\ Capital= 30\ days$

During a 30 - day month,days of working capital are 30 days.

Step-by-step explanation:

Formula for  days of working capital we are going to us is:

$Days\ of\ working\ Capital=(Current\ Assets\ -Current\ Liabilities) / \frac{Operation\ Expense}{Time Period}$In our case:

Current Assets= $40 million.

Current liabilities=$30 million.

Operation Expense= $10 million.

Time Period=30 days Month.

$Days\ of\ working\ Capital=\frac{\ 40\ million-\ 30\ million}{\frac{\ 10 million}{30}} \\Days\ of\ working\ Capital= 30\ days$

During a 30 - day month,days of working capital are 30 days.