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Difficulty: EasyCapital Structure Calculations (Working Capital, Capital Employed, Capital Owned)

A trading firm recorded current assets of ₦450,000, current liabilities of ₦180,000, fixed assets of ₦850,000, and long-term liabilities of ₦200,000. What is the working capital of the firm in Naira?

Answer: 270000 Naira

Answer

The working capital of the firm is ₦270,000.
Working capital is calculated as Current Assets minus Current Liabilities. Subtracting ₦180,000 from ₦450,000 yields ₦270,000.

Step-by-Step Solution

1
Identify the components required for working capital.
Current Assets = ₦450,000 and Current Liabilities = ₦180,000.
Working capital measures short-term liquidity using short-term assets and short-term obligations.
2
Calculate working capital by subtracting current liabilities from current assets.
₦450,000 - ₦180,000 = ₦270,000.
The formula for working capital is Current Assets minus Current Liabilities.

Key Concept

Working Capital
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Topics

Capital Structure Calculations (Working Capital, Capital Employed, Capital Owned)

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