Working Capital Calculator
Calculate your working capital and current ratio.
Assess your business liquidity and ability to meet short-term obligations.
Working Capital
Working Capital measures a company"s short-term financial health and operational efficiency.
Working Capital = Current Assets - Current Liabilities
Current Ratio (also called Working Capital Ratio):
Current Ratio = Current Assets / Current Liabilities
Current ratio benchmarks:
- Below 1.0: Potential liquidity issues — liabilities exceed assets
- 1.0–1.5: Tight but manageable; common in retail
- 1.5–2.0: Healthy range for most businesses
- 2.0–3.0: Strong liquidity position
- Above 3.0: May indicate inefficient use of assets
Current Assets include: cash, accounts receivable, inventory, prepaid expenses Current Liabilities include: accounts payable, short-term debt, accrued expenses, taxes owed
Example: $200,000 in current assets, $120,000 in current liabilities:
- Working Capital: $80,000
- Current Ratio: 1.67 (healthy)