CFA Level I · CFA Level I Exam · Analyzing Balance Sheets
At year-end, a company has total assets of 840, current assets of 310, current liabilities of 190, and total equity of 450. Its working capital and non-current liabilities are, respectively, closest to:
Working capital is 310 minus 190, or 120. Total liabilities are 840 minus 450, or 390, so non-current liabilities are 390 minus 190, or 200. The pair is working capital 120 and non-current liabilities 200.
- AWorking capital 120; non-current liabilities 200
- BWorking capital 120; non-current liabilities 390Correct
- CWorking capital 310; non-current liabilities 200
Explanation
Working capital = 310 − 190 = 120. Total liabilities = 840 − 450 = 390. Non-current liabilities = 390 − 190 = 200. So the correct pair is 120 and 200. Option B uses total liabilities of 390 wrongly, so the key is option A.
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