Canyon Tours showed the following components of working capital last year:

 Beginning of YearEnd of YearAccounts receivable

$ 24,000

$ 23,000

Inventory

12,000

12,500

Accounts payable

14,500

16,500

What was the change in net working capital during the year?

**Note: A negative amount should be indicated by a minus sign.**

To calculate the change in net working capital (NWC), we use the following formula:

\[
\text{NWC} = \text{(Accounts Receivable + Inventory) - Accounts Payable}
\]

### Step 1: Calculate Net Working Capital at the Beginning of the Year
\[
\text{NWC}_{\text{beginning}} = (24,000 + 12,000) - 14,500 = 36,000 - 14,500 = 21,500
\]

### Step 2: Calculate Net Working Capital at the End of the Year
\[
\text{NWC}_{\text{end}} = (23,000 + 12,500) - 16,500 = 35,500 - 16,500 = 19,000
\]

### Step 3: Calculate the Change in Net Working Capital
\[
\text{Change in NWC} = \text{NWC}_{\text{end}} - \text{NWC}_{\text{beginning}} = 19,000 - 21,500 = -2,500
\]

### Answer
The change in net working capital during the year was $-2,500$.

Would you like more details or have any questions? 

Here are 5 related questions:
1. How does a change in accounts receivable impact net working capital?
2. Why is a decrease in net working capital represented as a negative amount?
3. How does inventory fluctuation affect net working capital?
4. What role does accounts payable play in calculating net working capital?
5. How might this change in net working capital influence a company's cash flow?

**Tip:** A decrease in net working capital can indicate a shift in a company's liquidity, potentially freeing up cash flow.

Canyon Tours showed the following components of working capital last year:

 Beginning of Year End of Year Accounts receivable

$ 24,000

$ 23,000

Inventory

12,000

12,500

Accounts payable

14,500

16,500

What was the change in net working capital during the year?

**Note: A negative amount should be indicated by a minus sign.**

Learn how to calculate the change in net working capital for Canyon Tours, using accounts receivable, inventory, and accounts payable data from the beginning and end of the year. This example provides a detailed calculation, demonstrating key concepts in financial accounting suitable for finance students.

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