To solve the problem shown in the image, we will calculate the Working Capital based on the XYZ Balance Sheet as of 31st March 2014.

Working Capital Formula:

$\text{Working Capital} = \text{Current Assets} - \text{Current Liabilities}$

From the balance sheet:

• Current Assets include:

  • Stock = 75,000
  • Debtors = 30,000
  • Cash = 15,000
  • Bank = 20,000

  Total Current Assets = 75,000 + 30,000 + 15,000 + 20,000 = 140,000

• Current Liabilities include:

  • Creditors = 70,000
  • Bank Overdraft = 130,000

  Total Current Liabilities = 70,000 + 130,000 = 200,000

Calculation of Working Capital:

$\text{Working Capital} = 140,000 - 200,000 = -60,000$

The working capital is negative, indicating a deficit of ₹60,000.

Would you like further details on this calculation or more context on working capital? Here are five questions that can expand your understanding:

1. How does negative working capital affect a company's liquidity?
2. What other financial ratios can be derived from a balance sheet?
3. How do current assets and liabilities impact business operations?
4. What strategies can a company use to improve its working capital?
5. Can a business survive long-term with negative working capital?

Tip: Monitoring working capital is essential for maintaining liquidity and ensuring a business can meet its short-term obligations.