Hello, Thank you for any and all help you give! I am in a Finance and Value Crea
ID: 2654609 • Letter: H
Question
Hello,
Thank you for any and all help you give!
I am in a Finance and Value Creation course. I am using this textbook:
Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2014). Corporate finance: Core principles and applications (4th ed.). New York, NY: McGraw-Hill. ISBN: 9780077861650.
I am stuck on this problem, I need to know what sums to add/subtract to get the
(1) CURRENT ASSETS
CHAPTER 18: PROBLEM 2
Net Worth
$13,205
Long-term Debt
$8,200
Net Working Capital (Excluding Cash)
$3,205
Fixed Assets
$17,380
Current Liabilities
$1,630
Current Assets =
#NAME? (EXCEL FORMULA: B? + B?)
CHAPTER 18: PROBLEM 2
Net Worth
$13,205
Long-term Debt
$8,200
Net Working Capital (Excluding Cash)
$3,205
Fixed Assets
$17,380
Current Liabilities
$1,630
Current Assets =
#NAME? (EXCEL FORMULA: B? + B?)
Explanation / Answer
Current Assets by definition is are those assets used for a firm's day to day operation. These assets are either in cash form or are expected to be realised with in the ordinary courses of the business.
So, Current Assets are: Cash, Sundry Debtors, Inventory, Notes receivable.
In this example Add Cash and Current Liabilities to Net Working Capital to get Current Assets.
It is because Working capital = Current Assets - Current Liabilities
and Working Capital = working capital excluding cash + Cash.
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