|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||?|
|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)|
|Delta RE||$300||Retained Earnings||675||Delta Short-term Notes Payable||$200|
|Liabilities and Shareholder's Equity||$4,400||Delta Long-term Debt||$300|
|Cash Flow from Financing||?|
|Delta Cash and Equivalents||?|
What is the additional funds needed for working capital (AFNWC)?
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
Correct answer: Option 3) $520.
- Additional funds needed for working capital (AFNWC) = Change in accounts receivable + Change in...
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fromChapter 8 / Lesson 11
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.