https://file.aiquickdraw.com/mathbot/file/1726755270303l9ryrs3w.jpg

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.

Calculate Working Capital based on the XYZ Balance Sheet as of 31st March 2014.

Learn how to calculate the working capital based on the balance sheet of XYZ Company as of March 31, 2014. Understand the formula for Working Capital = Current Assets - Current Liabilities, using the provided values for assets and liabilities. Suitable for business and finance students.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation