Quantitative Problem: Rosnan Industries\' 2013 and 2012 balance sheets and incom
ID: 2482622 • Letter: Q
Question
Quantitative Problem: Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below.
The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash. What is Rosnan's 2013 net operating working capital (NOWC)?
Balance Sheets: 2013 2012 Cash and equivalents $60 $45 Accounts receivable 275 300 Inventories 375 350 Total current assets $710 $695 Net plant and equipment 2,000 1,490 Total assets $2,710 $2,185 Accounts payable $150 $85 Accruals 75 50 Notes payable 110 135 Total current liabilities $335 $270 Long-term debt 450 290 Common stock 1,225 1,225 Retained earnings 700 400 Total liabilities and equity $2,710 $2,185Explanation / Answer
Net operating working capital (NOWC)
Sl no Particulars Amount Year 2013 i Operating Current Assets Cash and equivalents 60 Accounts receivable 275 Inventories 375 Sub-total 710 ii Operating CURRENT LIABILITIES Taxes 235 Accounts payable 150 Accruals 75 Sub-total 460 iii Net operating Working Capital (ii - i) 250