Working Capital Calculator

Calculate working capital, current ratio, and liquidity metrics for your business. Assess short-term financial health.

Cash in bank, savings, money market

Money owed by customers

Value of goods for sale

Prepaid expenses, short-term investments

Money owed to suppliers

Loans/debt due within 1 year

Wages, taxes, utilities owed

Other short-term obligations

Working Capital = Current Assets - Current Liabilities\nCurrent Ratio = Current Assets / Current Liabilities\nQuick Ratio = (Current Assets - Inventory) / Current Liabilities\nCash Ratio = Cash / Current Liabilities\n\nCurrent Assets: Cash, A/R, Inventory, Other\nCurrent Liabilities: A/P, Short-term Debt, Accrued Expenses
Example:\nCurrent Assets:\n- Cash: $50,000\n- Accounts Receivable: $30,000\n- Inventory: $20,000\n- Other: $5,000\nTotal: $105,000\n\nCurrent Liabilities:\n- Accounts Payable: $25,000\n- Short-term Debt: $15,000\n- Accrued Expenses: $10,000\n- Other: $5,000\nTotal: $55,000\n\nWorking Capital = $105,000 - $55,000 = $50,000\nCurrent Ratio = $105,000 / $55,000 = 1.91\nQuick Ratio = ($105,000 - $20,000) / $55,000 = 1.55\n\nHealth: GOOD - Healthy liquidity position

What is working capital?

Working capital is the money available for day-to-day business operations. Formula: Current Assets - Current Liabilities. Positive working capital means you can pay short-term bills. Negative means you may struggle to cover expenses and need financing or asset liquidation.

What is a good working capital ratio?

Working Capital Ratio (Current Ratio) = Current Assets / Current Liabilities. Ideal: 1.5 to 2.0. Below 1.0: liquidity problems. Above 2.0: inefficient use of assets. Varies by industry—retail may need lower, manufacturing higher. Compare to industry benchmarks.

What are current assets and current liabilities?

Current Assets: cash, accounts receivable, inventory, marketable securities (convertible to cash within 1 year). Current Liabilities: accounts payable, short-term debt, accrued expenses, taxes payable (due within 1 year). Working capital = the difference.

How do I improve my working capital?

Increase current assets: collect receivables faster, reduce inventory levels, negotiate better payment terms. Decrease current liabilities: extend payables (don't hurt credit), refinance short-term debt to long-term, reduce unnecessary expenses. Focus on cash conversion cycle.

What is the difference between working capital and cash flow?

Working capital is a balance sheet snapshot (assets - liabilities at a point in time). Cash flow tracks actual cash movement over a period. You can have positive working capital but negative cash flow if assets are tied up in inventory/receivables. Both are crucial for business health.