# question about changes in net working capital (1 Viewer)

#### RakeshCristoval

##### Member
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

##### Well-Known Member
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.

#### jimmysmith560

##### Le Phénix Trilingue
Moderator
It's the other way around.

Year 1:

6 + 21 + 5 - 18 = 14 million

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