Homework SourseFind Operating Capital Level for 2014 Asset Year 2014 2013 2
Find Operating Capital Level for 2014.
Asset Year
2014
2013
2012
Cash
14,000
7,282
9,000
Acct Receivable
878,000
632,160
351,200
Inventories
1,716,480
1,278,360
715,200
FA
817,040
939,790
344,800
Acct Payable
436,800
524,160
145,600
Accrual
408,000
489,600
136,000
Income Statement Year
2014
2013
2012
EBIT
510,640
-690,560
209,100
TAX
40%
| Asset Year | 2014 | 2013 | 2012 |
| Cash | 14,000 | 7,282 | 9,000 |
| Acct Receivable | 878,000 | 632,160 | 351,200 |
| Inventories | 1,716,480 | 1,278,360 | 715,200 |
| FA | 817,040 | 939,790 | 344,800 |
| Acct Payable | 436,800 | 524,160 | 145,600 |
| Accrual | 408,000 | 489,600 | 136,000 |
| Income Statement Year | 2014 | 2013 | 2012 |
| EBIT | 510,640 | -690,560 | 209,100 |
| TAX | 40% |
Solution
Current Assets = Cash + Accounts Receivable + Inventories
Current Assets = $14,000 + $878,000 + $1,716,480
Current Assets = $2,608,480
Current Liabilities = Accounts Payable + Accruals
Current Liabilities = $436,800 + $408,000
Current Liabilities = $844,800
Operating Capital = Current Assets + Fixed Assets - Current Liabilities
Operating Capital = $2,608,480 + $817,040 - $844,800
Operating Capital = $2,580,720
