Question:

Can anyone explain the difference between working capital and net assets?

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Just say I am starting a new business, it is the end of my first week and I have to draw up my fixed assets, current assets less liabilities,my working capital would be fixed assets less liabilities what would my net assets be for that week? What exactly is the differnce between working capital and net assets applied to the first week. Am desperate help appreciated. Thanks :-)

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2 ANSWERS


  1. Working capital is current assets less current liabilities (not fixed assets).  Net assets is Total Assets minus Total Liabilities., the same as Net Worth.  First week or last week, your working capital and net assets are as of a point in time, not over a week.


  2. NET ASSETS = Total Assets (Fixed + Current) - Total Liabilities (Short & long term)

    WORKING CAPITAL =  Current Assets (Cash  Accounts, Debtors and stock) - current liabilities  (Creditors)

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