Ajay Mady In: Category - AssetsWhat is the formula to calculate net current assets?formulanet current assets ShareFacebook1 AnswerVotedRecent Palaktripathi 2020-07-22T17:05:36+05:30Added an answer on July 22, 2020 at 5:05 pm This answer was edited. Meaning of Net Current AssetsIn simple terms, Net Current Assets refers to the total amount of current assets excluding the total amount of current liabilities in a business. It can also be referred to as Net Working Capital.The Net Current Assets can have a positive or a negative value, wherein the two are an indicator of the well-being of a business. In case the current assets are greater than the current liabilities, the company possesses sufficient assets to pay off its indebtedness and is operating efficiently. However, a company is said to be facing financial difficulty and is not in a position to pay off its debts, when the value of net current assets is negative.The formula is as follows:Difference between Net Current Assets and Current AssetsNet Current Assets refers to the difference between the total amount of current assets and the total amount of current liabilities whereas Current Assets are a subpart of Net Current Assets and refer to those assets that are expected to be utilized, depreciated or traded through the operations of a business within the same financial year.For example, cash and cash equivalents, inventory, accounts receivable, etc are Current Assets whereas the summation of the same minus the total of current liabilities is termed as Net Current Assets which is further explained through an example given below.Numerical ExampleCalculate the Net Current Assets of ABC Ltd.(Extract of Balance Sheet)PARTICULARSAMOUNTCURRENT ASSETSCash and Cash Equivalents2,00,000Accounts Receivables40,000Stock Inventory15,000Marketable Securities35,000Prepaid Expenses6,000TOTAL CURRENT ASSETS2,96,000CURRENT LIABILITIESAccounts Payable15,000Accrued Expense2,000Unearned Revenue20,000Taxes Payable40,000Short-term Debt10,000Interest Payable6,000TOTAL CURRENT LIABILITIES93,000Solution:Total current assets = 2,96,000Total current liabilities= 93,000Net Current Assets = Total Current Assets – Total Current Liabilities= 2,96,000- 93,000 = 2,03,000Key TakeawaysNet Current Assets are also known as Net Working Capital.Net Current Assets is the difference between the total current assets and total current liabilities.1Reply Share ShareShare on FacebookShare on TwitterShare on LinkedInShare on WhatsAppLeave an answerCancel replyYou must login or register to add a new answer.