Working Capital Calculator
Calculate working capital, current ratio, and working capital ratio to assess short-term liquidity.
Results
What is it?
Working capital is the difference between current assets and current liabilities. It measures a company's ability to meet short-term obligations using short-term assets. Positive working capital means the company can pay its near-term debts; negative working capital is a warning sign.
How to use
Enter total current assets (cash, accounts receivable, inventory, prepaid expenses) and total current liabilities (accounts payable, accrued liabilities, short-term debt). The calculator returns working capital in dollars, the current ratio, and the working capital ratio.
Example scenario
Current assets $500k, current liabilities $300k: Working capital = $200k, current ratio = 1.67x, WC ratio = 40%. The company has comfortable short-term liquidity.
Pro tip
Positive working capital does not guarantee good cash flow if receivables are slow to collect or inventory is hard to sell. Analyze the cash conversion cycle (days sales outstanding + days inventory outstanding - days payable outstanding) for a fuller picture of working capital efficiency.