question about changes in net working capital (1 Viewer)

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hey guys,

so in my tutorial, we went through this question (attached).

from my understanding the formula for changes in net working capital is:

the change in cash + change in accounts receivable + inventory - accounts payable

for year 1, the changes in working capital are -14 million, but im not sure why it is minus, not plus? im not getting why its - cash - accounts receivable - inventory + acc payable.

if someone could please explain to me as to why this is, thatd be great thanks in advance
 

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idkkdi

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hey guys,

so in my tutorial, we went through this question (attached).

from my understanding the formula for changes in net working capital is:

the change in cash + change in accounts receivable + inventory - accounts payable

for year 1, the changes in working capital are -14 million, but im not sure why it is minus, not plus? im not getting why its - cash - accounts receivable - inventory + acc payable.

if someone could please explain to me as to why this is, thatd be great thanks in advance
i reckon ur tutor was being a monkey.
 

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