Working Capital Calculator
Measures what a business could pay from assets it expects to turn into cash within a year.
Share sends a link that reopens these numbers. Copy details pastes the full breakdown as a list.
The formula
working capital = current assets − current liabilities current ratio = current assets ÷ current liabilities quick ratio = (cash + receivables) ÷ current liabilities
The quick ratio leaves out inventory and prepayments, because they are slower or harder to turn into cash.
What to watch out for
Take every figure from the same balance sheet date. Include the part of any long-term loan due within the next year in current liabilities.
Frequently Asked Questions
How do I calculate working capital?
Take current liabilities from current assets. 160,000 − 80,000 = 80,000.
What is the difference between the current ratio and the quick ratio?
The current ratio counts all current assets. The quick ratio counts only cash and receivables, since stock may take time to sell. With 40,000 of cash, 60,000 of receivables and 50,000 of inventory, plus 10,000 of other current assets, against 80,000 of liabilities, they come to 2.00 and 1.25.
What is a good current ratio?
It depends on the industry. A supermarket that sells stock quickly and pays suppliers later can run on a far lower ratio than a manufacturer with slow stock. Compare with similar businesses and watch your own trend.