Question

7. The 2008 balance sheet of Saddle Creek, Inc., showed current assets of $1,390 and current liabilities of $880. The 2009 balance sheet showed current assets of $1,680 and current liabilities of $1,040. What was the company's 2009 change in net working capital, or NWC?

Answer 1

Answer:

$130

Explanation:

The change in net working capital during 2009 shall be determined through following mentioned formula:

Change in net working capital=Net working capital in 2009-Net working capital in 2008

Net working capital in 2009=current assets in 2009-current liabilities in 2009

                                              =$1,680-$1,040

                                              =$640

Net working capital in 2008=current assets in 2008- current liabilities in 2008

                                              =$1,390-$880

                                              =$510

Change in net working capital=$640-$510

                                                  =$130