What is the change in NWC?

[Powerhog1982]

Can someone help me figure this out…
here is an example of a topic test question I was struggling to understand.
2012 2013
cash 100 200
A/R 50 100
A/P 100 300
Long term debt 50 50

How would one calculate change in NWC?

 

[hai2u]

150

 

[Moey]

I’d think it’s Δcash + ΔA/R - ΔA/P = 100 + 50 - 200 = -50. I could be wrong though, def not comfortable on this material.

 

[JeffO15]

-150. So it freed up cash

 

[ThomasW]

-150

 

[JayWill]

ΔWC = ΔNon-Cash Assets - ΔNon-Debt Liabilities
AR = Asset; AP = Liability
(100-50) - (300-100) = 50 - 200 = -150

 

[Moey]

JayWill wrote:
ΔWC = ΔNon-Cash Assets - ΔNon-Debt Liabilities

Thanks JayWill for the clarification, next time.

 

[Powerhog1982]

cool deal. I don’t know why that got me confused a bit but I didnt see it clearly in the material.

 

[Powerhog1982]

cool deal. I don’t know why that got me confused a bit but I didnt see it clearly in the material.