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Galaxy Interiors 2011 Income Statement ($ in millions) Net sales $21,415 Cost of

ID: 2642628 • Letter: G

Question

Galaxy Interiors 2011 Income Statement ($ in millions) Net sales $21,415 Cost of goods sold 16,408 Depreciation 1,611 Earnings before interest and taxes 3,396 Interest paid 1,282 Taxable Income $ 2,114 Less: Taxes 740 Net income $ 1,374 Galaxy Interiors 2010 and 2011 Balance Sheets ($ in millions) 2010 2011 2010 2011 Cash $ 668 $ 297 Accounts payable $1,694 $ 1,532 Accounts receivable 1,611 1,527 Notes payable 2,500 0 Inventory 3.848 2,947 Total $4,194 $ 1,532 Total $ 6,127 $ 4,771 Long-term debt 9,800 10,650 Net fixed assets 17,489 17,107 Common stock 7,500 7,000 Retained earnings 2,122 2,696 Total assets $23,616 $21,878 Total liab. & equity $23,616 $21,878 What is the change in the net working capital from, 2010 to 2011?

Explanation / Answer

Net working capital =Current Asset-Current Liabilities

Net working capital in 2010 =6127-4194=$1933million

Net working capital in 2010 =4771-1532=$3239million

Change in the net working capital =3239-1933=$1306million