Asked by LaQuesha Jewell on May 09, 2024

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A firm has current assets of $10,000 and current liabilities of $6,000. Cash and marketable securities total $4,000, the balance in accounts receivable is $2,000, and the book value of inventory is $4,000. The firm's net working capital is:

A) $2,000.
B) $4,000.
C) $6,000.
D) $9,000.
E) None of the above

Net Working Capital

The disparity between an organization's immediate assets and its short-term obligations.

Marketable Securities

Liquid financial instruments that can be quickly converted into cash at their fair market value.

Accounts Receivable

Funds that clients or customers owe to a business for products or services they have received but have not yet paid for.

  • Determine the net working capital and its relevance.
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Christopher ValadezMay 10, 2024
Final Answer :
B
Explanation :
Net working capital is calculated as current assets minus current liabilities. Here, it is $10,000 - $6,000 = $4,000.