An increase in stock of Rs. 250, a decrease in bank balance of Rs. 400, and an increase in creditors of Rs. 1200 results in _____?
Answer: A decrease in working capital of Rs. 1,350
Explanation
Working capital = Current Assets - Current Liabilities
- Increase in stock (Rs. 250) → Increases current assets
- Decrease in bank balance (Rs. 400) → Decreases current assets
- Increase in creditors (Rs. 1200) → Increases current liabilities
Net impact on working capital:
(250 - 400 - 1200) = -1350
Thus, there is a decrease of Rs. 1,350 in working capital.
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