Question
What will be the working capital if Cash & Bank
Rs.20,000; Debtors Rs.2,00,000; Creditors Rs.1,00,000; Bills Payable Rs.50,000 and Stock is Rs.2,80,000.Solution
Working capital = current assets – current liabilities Here current assets include cash and bank, debtors and stock = 20,000 + 2,00,000 + 2,80,000 = Rs.5,00,000 Current liabilities = creditors and bills payable = Rs.1,50,000 As such, working capital = Rs.5,00,000 – Rs.1,50,000 = Rs.3,50,000
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