Working Capital Calculator
Working capital and the current ratio from current assets and liabilities, operating working capital, and how many days of revenue it represents.
Result
Working capital: $145,000.00
A snapshot on one date. Working capital swings with the season and with when bills fall due. No healthy level is given.
- Current ratio
- 1.74
https://calcgallery.com/business-investing/working-capital-calculator/
Results are arithmetic estimates based on the assumptions you enter, not accounting, tax, investment or lending advice. Forecasts can be wrong and important decisions should be checked with a qualified adviser. Read the full disclaimer
How to use the Working Capital Calculator
- Enter current assets and current liabilities from the same balance sheet date.
- Optionally enter inventory, receivables and payables, for operating working capital.
- Optionally enter annual revenue, to see working capital as a share of it and in days.
The formulas
working capital = current assets − current liabilitiescurrent ratio = current assets ÷ current liabilitiesoperating working capital = inventory + receivables − payablesdays of revenue = working capital ÷ annual revenue × 365One number, two views
Working capital is an amount; the current ratio is the same comparison as a ratio. With 340,000 of current assets and 195,000 of current liabilities, working capital is 145,000 and the current ratio is 1.74. The current ratio calculator goes further, with the quick and cash ratios, which leave out assets that are slower to turn into cash.
A snapshot
These figures come from one balance sheet date. A business that buys stock for a busy season can look very different a month either side of it. Compare the same date each year, or several dates across the year.
With your numbers
- Working capital = $340,000.00 − $195,000.00 = $145,000.00
- Current ratio = $340,000.00 ÷ $195,000.00 = 1.7436
- Operating working capital = $120,000.00 + $145,000.00 − $98,000.00 = $167,000.00
Quick reference
A snapshot on one date. Working capital swings with the season and with when bills fall due. No healthy level is given.
| Example | Working capital |
|---|---|
| 340,000 assets, 195,000 liabilities | $145,000.00 |
| Reversed: 195,000 assets, 340,000 liabilities | -$145,000.00 |
| With inventory, receivables and payables | $145,000.00 |
| With 1.5 million of revenue | $145,000.00 |
| No current liabilities | $80,000.00 |
| Small shop, 45,000 and 30,000 | $15,000.00 |
Common questions about the Working Capital Calculator
- What counts as current?
- Anything that turns into cash, or falls due, within a year. Current assets are cash, receivables, inventory and prepaid costs. Current liabilities are supplier bills, short-term loans, the part of long-term loans due in the next year, and wages or tax owed.
- Is negative working capital bad?
- Not always. It means more is due within a year than the current assets will bring in, so the business depends on new sales to pay its bills. For a shop paid in cash before it pays its suppliers, that can be normal. For a business that waits months to be paid, it is a warning. The page reports the figure and does not judge it.
- What is operating working capital?
- Inventory plus receivables less payables: the cash tied up in running the business day to day, leaving out cash and debt. With 120,000 of inventory, 145,000 of receivables and 98,000 of payables it is 167,000. Collecting faster, holding less stock or paying suppliers later all reduce it and free cash.
- How much working capital should I have?
- This page does not give a level. It depends on how fast your stock turns, how quickly customers pay, what your suppliers allow and how seasonal your trade is.