Working Capital Calculator
Working capital is what is left of the short-term balance sheet after the short-term bills. It answers a blunt question: if everything due within a year came at once, would you still be solvent?
Working capital
$110,000.00
- Current ratio
- 2.2222
- Current assets
- $200,000.00
- Current liabilities
- $90,000.00
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
working capital = current assets - current liabilities
- current assets
- Cash, receivables, inventory and other short-term assets
- current liabilities
- Payables, short-term debt and accrued obligations
- working capital
- The surplus or shortfall in the short-term balance sheet
- current ratio
- Current assets divided by current liabilities
How to check the result by hand
- 1
List the current assets
Cash, money owed by customers, inventory and prepayments. Only include what will realistically convert to cash inside a year, and be honest about slow-moving stock.
- 2
List the current liabilities
Supplier payables, short-term borrowings, accrued wages and taxes due. These are the obligations the assets have to cover.
- 3
Subtract liabilities from assets
Two hundred thousand of assets against ninety thousand of liabilities leaves one hundred and ten thousand of working capital.
- 4
Divide for the current ratio
Two hundred thousand divided by ninety thousand is about 2.2, meaning the business holds more than twice the short-term assets it needs to cover its short-term bills.
- 5
Compare against the industry and against last year
A ratio means nothing in isolation. Track it over time and against peers, and dig into inventory ageing and receivable ageing before drawing conclusions.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Working Capital page.