Calculate the operating working capital

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Reference no: EM133032855

Problem:

Consider the following information.

Assets

 

Equity and liabilities

 

Cash

$500 000

Current debt

$200 000

Non-cash current assets

$900 000

Other current liabilities

$1 000 000

Minority equity investment

$100 000

Non-current debt

$300 000

Non-current assets

$500 000

Deferred tax liability

$100 000

 

 

Equity

$400 000

Total

$2 000 000

Total

$2 000 000

The company requires a cash balance of $300 000 for its operations.

Required:

Calculate the operating working capital. Comment whether the resulting operating working capital is an ideal amount for a company.

Reference no: EM133032855

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