Change in Net Working Capital Calculator

Formula

The formula to calculate the change in net working capital (WC) is:

\[ WC = CWC - PWC \]

Where:

$ WC $ is the change in working capital.
$ CWC $ is the current net working capital.
$ PWC $ is the previous net working capital.

Example

Let's say the current net working capital ($ CWC $) is $50,000, and the previous net working capital ($ PWC $) is $40,000. Using the formula:

\[ WC = 50000 - 40000 \]

We get:

\[ WC = 10000 \]

So, the change in net working capital ($ WC $) is $10,000.

Additional Example

Suppose the current net working capital ($ CWC $) is $30,000, and the previous net working capital ($ PWC $) is $35,000. Using the formula:

\[ WC = 30000 - 35000 \]

We get:

\[ WC = -5000 \]

So, the change in net working capital ($ WC $) is -$5,000, indicating a negative change.

What is Change in Net Working Capital?

The change in net working capital is simply the subtraction of the previous net working capital from the current. It is possible for this value to be negative, in which case there is a negative change in NWC.

Extended information about "Change-in-Net-Working-Capital-Calculator"

Change in Net Working Capital

Definition: Calculate the change in net working capital.

Formula: $ \Delta NWC = NWC_{end} - NWC_{beginning} $

$ \Delta NWC $: Change in net working capital
$ NWC_{end} $: Net working capital at the end of the period
$ NWC_{beginning} $: Net working capital at the beginning of the period

Example: $ \Delta NWC = 50000 - 30000 $

$ NWC_{end} $: 50000
$ NWC_{beginning} $: 30000

Changes in Net Working Capital Formula

Definition: Calculate the changes in net working capital.

Formula: $ \Delta NWC = (CA_{end} - CL_{end}) - (CA_{beginning} - CL_{beginning}) $

$ \Delta NWC $: Change in net working capital
$ CA_{end} $: Current assets at the end of the period
$ CL_{end} $: Current liabilities at the end of the period
$ CA_{beginning} $: Current assets at the beginning of the period
$ CL_{beginning} $: Current liabilities at the beginning of the period

Example: $ \Delta NWC = (60000 - 20000) - (40000 - 15000) $

$ CA_{end} $: 60000
$ CL_{end} $: 20000
$ CA_{beginning} $: 40000
$ CL_{beginning} $: 15000

Net Working Capital Calculation

Definition: Calculate the net working capital.

Formula: $ NWC = CA - CL $

$ NWC $: Net working capital
$ CA $: Current assets
$ CL $: Current liabilities

Example: $ NWC = 70000 - 25000 $

$ CA $: 70000
$ CL $: 25000