• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • FIA Forums
  • CIMA Forums
  • OBU Forums
  • Qualified Members forum
  • Buy/Sell Books
  • All Forums
  • Latest Topics

March 2026 ACCA Exams

Comments & Instant poll

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for June 2026 exams.
Get your discount code >>

Why inventory increase doesnt affect working capital

Forums › ACCA Forums › ACCA FM Financial Management Forums › Why inventory increase doesnt affect working capital

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by quangtuan.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • March 12, 2018 at 1:28 am #442254
    nhatanh2197
    Member
    • Topics: 10
    • Replies: 5
    • ☆

    This is the question i came across in BPP revision book:

    Gorwa Co’s working capital is most likely to increase in which of the following situations?

    a/ Payments to suppliers are delayed
    b/ The period of credit extended to customers is reduced
    c/ Non-current assets are sold
    d/ Inventory levels are increased

    The answer is C and the explaination is ” other situations have limit or no effect on working capital”.

    My question is why the increase of inventory level doesnt affect working capital? Because clearly based on the formula ” Working capital= Receivables + Cash + Inventory – Payables” inventory increase will result in higher working capital.

    Thank you in advance for giving me a help.

    March 12, 2018 at 1:41 am #442255
    quangtuan
    Participant
    • Topics: 5
    • Replies: 5
    • ☆

    Working capital= Receivables + Cash + Inventory – Payables

    Inventory increasing means cash decreases or payables increases, that’s why Working Capital does not change.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Kaplan ACCA Free Trial

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE Exams – Instant Poll

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • zurapirveli@gmail.com on Equity settled share based payments – goods – ACCA (SBR) lectures
  • Sid24012003 on Intangibles – Example 2 – ACCA Financial Reporting (FR)
  • Ken Garrett on CIMA BA1 Spearman’s rank correlation coefficient
  • Ana1674 on CIMA BA1 Spearman’s rank correlation coefficient
  • tehreem21 on MA Chapter 2 Questions Sources of Data

Copyright © 2026 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in