Question

Rousey, Inc., had a cash flow to creditors of $16,380 and a cash flow to stockholders of $6,740 over the past year. The company also had net fixed assets of $49,380 at the beginning of the year and $56,740 at the end of the year. Additionally, the company had a depreciation expense of $11,940 and an operating cash flow of $50,265. What was the change in net working capital during the year?

Answer 1

Answer:

$7,845

Explanation:

Calculation for What was the change in net working capital during the year

First step is to calculate the Cash flow from assets

Cash flow from assets = $16,380 + 6,740

Cash flow from assets= $23,120

Second step is to calculate the Net capital spending

Net capital spending = $56,740 − 49,380 + 11,940

Net capital spending = $19,300

Now let calculate the Change in net working capital

Change in net working capital = $50,265 − 19,300 − 23,120

Change in net working capital= $7,845

Therefore the change in net working capital during the year will be $7,845