One reason NOT to include accounts payable (A/P) when calculating NWC is because A/P do not increase spontaneously with operations.

Question

Quizplus · Accepted Answer

Accounts payable (A/P) are not included in the calculation of net working capital (NWC) because they do not increase spontaneously with operations. A/P represents the amount owed to suppliers for goods or services that have been received but not yet paid for. As a result, A/P does not directly contribute to the company's ability to meet its short-term obligations.

One Reason NOT to Include Accounts Payable (A/P) When Calculating