Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

During 2018, cash and accounts receivable in the balance sheet presented amounts of USD 1,250,000 and USD 950,000 and for 2019 both presented an increase

During 2018, cash and accounts receivable in the balance sheet presented amounts of USD 1,250,000 and USD 950,000 and for 2019 both presented an increase of 10%. While the inventory remained at the same levels for both periods, with an amount of 3,050,000. Both accounts payable and accrued liabilities presented an increase of 5% for 2019. In 2018 the balance presented for each was USD 850,000 and USD 920,000 respectively. The documents payable, which correspond to the disbursement of a credit line of the company, presented a balance for 2018 of 1,500,000 and USD 4,050,000 for 2019. The behavior of the Net Operating Working Capital was as follows: Select one: A. It presented a decrease in 2019 due to the fact that total current liabilities in relation to the previous year presented an increase. b. It presented an increase in 2019 because the increase in cash and accounts receivable was greater than the increase experienced by current liabilities that do not earn interest. c. It presented an increase in 2019 due to the fact that all current assets increased in a greater proportion than the increase in current liabilities that do not earn interest.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Analysis For Financial Management

Authors: Robert Higgins

7th Edition

0072863641, 9780072863642

More Books

Students also viewed these Finance questions