GUSTAV company has got annual sales volume of 400.000units for the last 4 years. The 2021 end stock in the balance sheet is 450.000€ (854.320 units x 0,53€/unit).

•  As per the balance sheet below, please calculate Net Working Capital and explain if the company is in a good or bad situation.

•  The company want to buy a new warehouse in order to store all the units they have in stock. They want to ask the bank for a loan to return in 5 years.

o Do you think is a good option? Why?
o How would it affect the Net Working Capital?

Current Assets

Cash 150.000 €

Stocks 450.000 €

Accounts Receivable 50.000 €

Current Liabilities

Short term debt 180.000 €

Accounts payable 220.000 €

Answer rating: 100% (QA)

Net Working Capital Current AssetsCurrent Liabilities Current Assets A Cash 150000 Stock... View the full answer