The above diagram shows a balance sheet for a certain company. If the company pays back all of its accounts payable today using cash, what will its net working capital be?
Balance Sheet
Assets Liabilities
Current Assets Current Liabilities
Cash 49 Accounts payable 38
Accounts receivable 21 Notes payable/short-term debt 5
Inventories 18
Total current assets 88 Total current liabilities 43
Long-Term Assets Long-Term Liabilities
Net property, plant,
and equipment 122 Long-term debt 134
Total long-term assets 122 Total long-term liabilities 134
Total Liabilities 177
Stockholders' Equity 33
Total Assets 210 Total Liabilities and 210
Stockholders' Equity
A) $131 million
B) $6 million
C) $88 million
D) $45 million
Answer: D
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