Which financial statement provides information about a company's working capital?
Practice Questions
1 question
Q1
Which financial statement provides information about a company's working capital?
Income Statement
Cash Flow Statement
Balance Sheet
Statement of Changes in Equity
The Balance Sheet provides information about a company's working capital by listing current assets and current liabilities.
Questions & Step-by-step Solutions
1 item
Q
Q: Which financial statement provides information about a company's working capital?
Solution: The Balance Sheet provides information about a company's working capital by listing current assets and current liabilities.
Steps: 6
Step 1: Understand what working capital is. Working capital is the difference between a company's current assets and current liabilities.
Step 2: Identify the financial statements. There are several financial statements, but the main ones are the Balance Sheet, Income Statement, and Cash Flow Statement.
Step 3: Focus on the Balance Sheet. The Balance Sheet shows a company's financial position at a specific point in time.
Step 4: Look for current assets on the Balance Sheet. Current assets include cash, accounts receivable, and inventory.
Step 5: Look for current liabilities on the Balance Sheet. Current liabilities include accounts payable and short-term debt.
Step 6: Calculate working capital. Subtract current liabilities from current assets to find the working capital.
