What is the change in net working capital from 2014 to 2015? (in $ millions) a.
ID: 2738777 • Letter: W
Question
What is the change in net working capital from 2014 to 2015? (in $ millions) a. -$1,200 b. $1,257 c. $1,335 d. -$3,405
2014 and 2015 Balance Sheets for Nabors, Inc ($ millions)
2014 and 2015 Balance Sheets for Nabors, Inc
($ millions)
2014
2015
2014
2015
Cash
$ 405
$ 566
Accounts Payable
$ 3,770
$ 3,288
Accounts Rec.
3,685
3,452
Notes Payable
155
256
Inventory
3,850
4,798
Long-Term Debt
8,800
7,962
Net Fixed Assets
12,670
11,780
Common Stock
5,825
6,386
Retained Earnings
2,060
2,704
Total Assets
$ 20,610
$ 20,596
Total Liab. & Equity
$ 20,610
$ 20,596
2014 and 2015 Balance Sheets for Nabors, Inc
($ millions)
2014
2015
2014
2015
Cash
$ 405
$ 566
Accounts Payable
$ 3,770
$ 3,288
Accounts Rec.
3,685
3,452
Notes Payable
155
256
Inventory
3,850
4,798
Long-Term Debt
8,800
7,962
Net Fixed Assets
12,670
11,780
Common Stock
5,825
6,386
Retained Earnings
2,060
2,704
Total Assets
$ 20,610
$ 20,596
Total Liab. & Equity
$ 20,610
$ 20,596
Explanation / Answer
Answer: Option (b) $1,257.
Net working capital (NWC) = Current Assets - Current liabilities.
Current Assets = Cash + Accounts Receivable + Inventory
Current liabilities = Accounts payable + notes payable
Change in NWC = NWC 2015 - NWC 2014
= (566+3452+4798-3288-256) - (405+3685+3850-3770-155) = $1,257
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