Finance calculator
Working Capital Calculator
Working capital is the cash and near-cash a business has to cover its short-term obligations — current assets minus current liabilities. This calculator returns your net working capital and current ratio, two quick measures of whether you can comfortably meet bills due within a year.
How to use this calculator
- Enter your current assets (cash, receivables, inventory, and other assets convertible to cash within a year).
- Enter your current liabilities (payables and other obligations due within a year).
- Read your net working capital and current ratio.
Formula
- Net working capital = current assets - current liabilities
- Current ratio = current assets / current liabilities
Example calculation
With $250,000 in current assets and $150,000 in current liabilities, net working capital is $100,000 and the current ratio is about 1.7 to 1.
How to interpret the results
- Positive working capital means you can cover short-term obligations; negative can signal a cash crunch.
- A current ratio between roughly 1.5 and 2 is often considered healthy; well below 1 is a warning sign.
- Very high working capital isn't always good — it can mean idle cash or slow-moving inventory.
Frequently asked questions
What is a good amount of working capital?
Enough to comfortably cover short-term obligations with a buffer. As a ratio, a current ratio of about 1.5 to 2 is commonly viewed as healthy, though the right level varies by industry.
What is the current ratio?
Current ratio = current assets ÷ current liabilities. A ratio above 1 means current assets exceed current liabilities. Around 1.5-2 is often considered comfortable.
Can working capital be negative?
Yes. Negative working capital means current liabilities exceed current assets, which can signal short-term liquidity pressure — though some efficient businesses run that way deliberately.
Planning disclaimer
MoneyHackWise calculators are for general informational and planning purposes only and do not provide financial, investment, tax, legal, accounting, lending, or business advice. Results are estimates based on the inputs and assumptions shown.