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What is the additional funds needed for working capital (AFNWC)? O -$420 O $80 O $520 O $1,020

Question:

Kramerica Industries Income Statement Kramerica Industries Balance Sheet Kramerica Industries Statement of Cash Flows
Revenues $9,000 Cash and Equivalents $500 Operations
COGS 4,500 Accounts Receivable 2,000 Net Income ?
Gross profit $4,500 Inventory 600 Depreciation 300
Operating Expenses 3,500 Net Fixed Assets 1,300 Delta Accounts Receivable 470
Depreciation 300 Total Assets $4,400 Delta Inventory 300
EBIT $700 Delta Accounts Payable 250
Interest Expense 100 Accounts Payable $950 Cash Flow from Operations $205
EBT $600 Short-Term Notes Payable 200
Taxes 175 Accruals 75 Cash Flow from Investing ($2,000)
NI ? Long-Term Debt 1,000
Dividends ? Common Stock 1,500 Financing
Delta RE $300 Retained Earnings 675 Delta Short-term Notes Payable $200
Liabilities and Shareholder's Equity $4,400 Delta Long-term Debt $300
Dividends ?
Cash Flow from Financing ?
Delta Cash and Equivalents ?

What is the additional funds needed for working capital (AFNWC)?

O -$420

O $80

O $520

O $1,020

Working Capital:

Working capital represents the difference between the current assets and current liabilities and it is used to meet the day-to-day operations of the business. The additional funds needed for working capital suggests that additional funds from external sources will be needed to cover the increase in net operating working capital.

Answer and Explanation: 1

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Correct answer: Option 3) $520.

Explanation:

  • Additional funds needed for working capital (AFNWC) = Change in accounts receivable + Change in...

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What Is Working Capital? - Definition & Formula

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Chapter 8 / Lesson 11
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This lesson explains what working capital is, how it is used in a business, and why businesses need working capital to stay functional. We'll also look at the formula used to calculate working capital.


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