The following information is extracted from a company’s financial statements for the year: - Opening Working Capital: Rs. 1,20,000 - Closing Working Capital: Rs. 1,80,000 - Net Profit after Tax: Rs. 90,000 - Depreciation (non‑cash expense): Rs. 30,000 - Sale of a fixed asset for cash: Rs. 50,000 (book value Rs. 35,000) Calculate the net funds available for the company after accounting for the change in working capital.

Step-by-step solution

1. Calculate the increase in working capital: Closing WC – Opening WC = 1,80,000 – 1,20,000 = Rs. 60,000 (this is a fund application).
2. Identify the cash sources:
3. - Net profit (cash source) = Rs. 90,000.
4. - Depreciation (non‑cash expense added back) = Rs. 30,000.
5. - Gain on sale of fixed asset = Sale proceeds – Book value = 50,000 – 35,000 = Rs. 15,000 (cash source).
6. Add all cash sources: 90,000 + 30,000 + 15,000 = Rs. 135,000.
7. Subtract the fund application (increase in working capital): 135,000 – 60,000 = Rs. 75,000.
8. Hence, the net funds available after the working‑capital change are Rs. 75,000.

Concept tested: Fund flow statement – net funds calculation

Published 23 September 2026 · How this solution was prepared and checked