Asked by Mehki Welch on Jul 04, 2024
Verified
Arkin Corporation's total current assets are $290,000, its noncurrent assets are $520,000, its total current liabilities are $210,000, its long-term liabilities are $420,000, and its stockholders' equity is $180,000.Required: Compute the company's working capital. Show your work!
Working Capital
The difference between a company's current assets and current liabilities, indicating the short-term liquidity and operational efficiency.
Total Current Assets
The sum of all assets a company expects to convert into cash within one year, including cash, accounts receivable, and inventory.
Total Current Liabilities
The sum of all liabilities of a company that are expected to be settled within one fiscal year or an operating cycle, whichever is longer.
- Proficiency in assessing how liquid a company is by leveraging working capital, current ratio, and acid-test ratio.
Verified Answer
DF
Daniel FaggardJul 08, 2024
Final Answer :
Working capital = Current assets − Current liabilities = $290,000 − $210,000 = $80,000
Learning Objectives
- Proficiency in assessing how liquid a company is by leveraging working capital, current ratio, and acid-test ratio.