Question

In 2016, Southwest Airlines had negative net working capital of $(2,346) million and current assets of $4,498 million. The firm’s current liabilities are: A. $2,152 million B. $6,844 million C. $2,346 million D. $5,236 million E. There is not enough information to calculate the amount.

Answer 1

Answer:

B. $6,844 million.

Explanation:

We know,

Net working capital = Current asset - Current liabilities

Given,

Net working capital = $(2,346) million

Current asset = $4,498 million

Putting the value into the formula, we can get

Net working capital = Current asset - Current liabilities

Current liabilities = - Net working capital + Current asset

Current liabilities = - (2,346) + $4,498

Current liabilities = $2,346 + $4,498

Current liabilities = $6,844 million.

Option B is the correct answer.