This answer does not include accrued wages as a current liability in the working capital calculation. See the correct answer for a complete explanation.
This answer does not include inventory as a current asset in the working capital calculation. See the correct answer for a complete explanation.
Working capital is current assets minus current liabilities. Total assets minus total liabilities, which is stockholders' equity, stayed the same. But working capital did not stay the same.
Net working capital is calculated as current assets minus current liabilities. At January 1, current assets were 16 million and current liabilities were 7 million, giving a working capital of 9 million. At June 30, current assets were 18 million and current liabilities were 8 million, giving a working capital of 10 million. Thus, during the period, working capital increased by 1 million.
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From January 1 to June 30, the net working capital:
