1. When bank loan officers are evaluating the creditworthiness of a potential commercial borrower, they often look to the firms net working capital balance as an indicator of the firms overall liquidity. How is net working capital defined, and what does it tell loan officers about the liquidity of a firm?

2. Caraway Seed Company grows heirloom tomatoes and sells their seeds. Heirloom tomato plants are preferred by many growers for their superior flavor. At the end of the most recent year, the firm had current assets of $50,000, net fixed assets of $250,000, current liabilities of $30,000, and long-term debt of $100,000. a. Calculate Caraways stockholders equity. b. What is the firms net working capital? c. If Caraways current liabilities consist of $20,000 in accounts payable and $10,000 in short-term debt (notes payable), what is the firms net working capital?