PRACTICE · LEVEL 1 · ABOUT 5 MIN
Not triedWorking capital: get the sign right
Over the year, receivables rose 20, inventory rose 6, payables rose 9, accrued expenses rose 3, and the cash balance rose 15. All $M.
What happened to operating working capital, and what does that do to cash flow from operations?
Assumptions
- Operating working capital = receivables + inventory − payables − accrued expenses.
- Cash is excluded: it's what the cash flow statement explains, not an input to it.
Set 1 of 4