Working Capital Calculator
Enter your current assets and current liabilities to find working capital and the current ratio — the two key measures of whether a business can meet its short-term obligations.
Current assets minus current liabilities
1.67
current ratioCurrent assets
62.5%
Current liabilities
37.5%
- 1
Current assets
500,000 - 2
Current liabilities
300,000 - 3
Working capital
500,000 − 300,000 = 200,000Positive means liquid assets exceed near-term obligations; negative signals potential liquidity risk.
How does this calculator work?
Working capital equals current assets minus current liabilities. A positive result means the business can cover short-term obligations; negative means liabilities exceed liquid assets. The current ratio (assets ÷ liabilities) above 1.5 is generally considered healthy, though the ideal level varies significantly by industry.
Formula
How this is calculated
Working capital is the difference between a company's current assets — resources expected to be converted to cash within 12 months such as cash, receivables, inventory, and prepaid expenses — and its current liabilities, obligations due within 12 months such as accounts payable, short-term debt, and accrued expenses. A positive figure means the company has more liquid assets than near-term obligations, which is generally a sign of short-term financial health.
The current ratio divides current assets by current liabilities. A ratio above 1 means current assets exceed liabilities. A ratio between 1.5 and 2.0 is commonly cited as comfortable for most industries; below 1.0 indicates negative working capital and potential liquidity strain, while a very high ratio may indicate idle cash or slow-moving inventory.
The right level of working capital varies by industry and business model. Supermarkets often run with low or negative working capital because they collect cash before paying suppliers. Capital-intensive manufacturers typically need higher working capital to finance inventory and receivables. These are point-in-time snapshots; trends over time are more informative than a single reading.
Frequently asked questions
A current ratio between 1.5 and 2.0 is often cited as healthy for most businesses. The ideal range varies by industry — capital-light businesses and retailers can operate safely below 1.0, while manufacturers with long inventory cycles may need higher ratios.
Yes. Negative working capital means current liabilities exceed current assets. This can signal liquidity risk, but some business models — large retailers and subscription companies that collect cash upfront — routinely operate with negative working capital because payables exceed receivables by design.
Current assets are resources expected to be converted to cash or consumed within 12 months: cash and equivalents, marketable securities, accounts receivable, inventory, and prepaid expenses. Long-term investments, property, plant, equipment, and intangibles are not current assets.
Also known as
TG we-Calculate Editorial Team. (2026). Working Capital Calculator [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/working-capital-calculator
TG we-Calculate Editorial Team. "Working Capital Calculator." TG we-Calculate. 2026. https://we-calculate.com/calculator/working-capital-calculator.
TG we-Calculate Editorial Team, "Working Capital Calculator," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/working-capital-calculator
@misc{wecalculate_working_capital_calculator, title = {Working Capital Calculator}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/working-capital-calculator}}, year = {2026}, note = {TG we-Calculate} }
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