The table below contains data of Fincorp Inc. The balance sheet items correspond to values at year-end 2015 and 2016, while the income statement items correspond to revenues or expenses during the year ending in either 2015 or 2016. All values are in thousands of dollars.
revenue 4,500 4,600
cogs 1,400 1,500
depreciation 580 600
inventories 320 375
admin. exp. 570 620
interest exp. 220 220
federal and state taxes* 520 540
accounts payable 310 340
accounts receivable 440 470
net fixed assets** 4,100 5,000
long-term debt 1,600 2,050
notes payable 849 570
dividends paid 340 340
cash and marketable securities 860 470
*Taxes are paid in their entirety in the year that the tax obligation is incurred.
**Net fixed assets are fixed assets net of accumulated depreciation since the asset was installed.
What was the change in net working capital during the year?
The change in net... View the full answer
- Hi, unfortunately this answer shows as incorrect in my homework
- Nov 02, 2018 at 4:46pm
- Hello. I believe the thought process is correct. Did you include the negative sign? Else, the question require just the Net Working capital End of 2016=( Cash and marketable securities 470 + Accounts receivable 470 +Inventories 375) - (Accounts payable 340) Net Working capital End of 2016=1315-340=$975
- Nov 02, 2018 at 4:49pm
- Additionally, what are the instructions since the figures are in thousands of dollars?
- Nov 02, 2018 at 4:50pm
- Clarification: The notes payable are classified as either current liability or long term liability depending on when they are due. Assuming the notes payable are due in a year: The change in net working capital during the year=($975-570) - (1310-849)= -$56 or -56 000
- Nov 02, 2018 at 4:57pm
- Thank you so much! 56 turned out to be the correct answer. )) You always include the best explanations for the questions)
- Nov 03, 2018 at 2:32pm
- Thank you for the feedback. You are most welcome !
- Nov 03, 2018 at 2:35pm