A company has the following information: Opening working capital Rs. 1,00,000, Closing working capital Rs. 1,50,000, Net profit after tax Rs. 1,20,000, Depreciation Rs. 40,000, Sale of a fixed asset for cash Rs. 80,000 (book value Rs. 55,000). Compute the net funds available to the company after considering the change in working capital.

Step-by-step solution

1. Determine the increase in working capital: $1,50,000-1,00,000=50,000$
2. Add net profit: $1,20,000+40,000=1,60,000$
3. Add cash from sale of asset: $1,60,000+80,000=2,40,000$
4. Subtract the increase in working capital: $2,40,000-50,000=1,90,000$
5. The resulting amount is the net funds available to the company.

Concept tested: Net Funds Available

Published 25 September 2026 · How this solution was prepared and checked