Essential Mathematical Formulas for PMP Certification Test
A = B + C
Example
Assume you’re in charge of a project to offer handcrafted soaps. Your working capital consists of the following items:
– $10,000 in cash in your project’s bank account
– Soap supply inventory: $5,000
– Money owing by consumers who purchased soap but have yet to pay: $3,000
– Money owed to vendors for supplies: $2,000
The working capital formula is as follows:[textWorking Capital = textCurrent Assets minus textCurrent Liabilities]
So, given the above figures:
– Current Assets = $10,000 in cash + $5,000 in inventory + $3,000 in accounts receivable = $18,000
– Current Liabilities ($2,000) = $2,000
Working Capital = $18,000 (current assets) minus $2,000 (current liabilities) equals $16,000.
This project requires $16,000 in working capital. This money is critical for purchasing additional ingredients, paying expenses, and keeping your soap-making operation moving smoothly without running out of funds.
