Question

Balance sheet of ABC Ltd as on March 31, 2022.

Liabilities	Amount	Assets	Amount
Capital	50,000	Machinery	50,000
Creditors	30,000	Furniture	20,000
Bank Overdraft	5,000	Debtor	8,000
Short Term Loan	6,000	Short Term Investment	5,000
		Cash	6,000
	92,000		92,000

Net working capital of ABC Ltd is:

• A. 12,000
• B. 10,000
• C. 25,000
• D. 15,000

Hint:

Net working capital is a key measure of a company’s short-term financial health and operational efficiency.

Answer 1

The Correct Option is A

Net working capital is calculated as the difference between total assets and total liabilities. In this case: \[ \text{Net Working Capital} = \text{Total Assets}
- \text{Total Liabilities} = 92,000
- 80,000 = 12,000. \]