Working Capital Calculator
Find working capital, the current ratio and the quick ratio from a balance sheet.
About the Working Capital Calculator
Enter current assets (cash, receivables, inventory and others) and current liabilities (payables, short-term debt and others). The calculator gives working capital, the current ratio and the quick ratio.
Working capital is the short-term cushion a business has to pay its bills. A current ratio of 1.2–2 is common. The quick ratio leaves out inventory, which may be slow to turn into cash.
The formula
Working capital = current assets − current liabilities
- Current ratio
- current assets ÷ current liabilities
- Quick ratio
- (current assets − inventory) ÷ current liabilities
Worked example
Cash 50,000, receivables 80,000, inventory 60,000; payables 70,000, short-term debt 30,000
- Current assets 190,000; current liabilities 100,000
- Working capital: 90,000; current ratio 1.9
- Quick ratio: (190,000 − 60,000) ÷ 100,000 = 1.3
Things to keep in mind
- A snapshot on one date; seasonal businesses can look very different a few months later.
Questions people ask
Can working capital be too high?
Yes, it may mean idle cash or slow-moving stock.
Is negative working capital bad?
Not always; supermarkets often run negative because customers pay before suppliers.
What counts as current?
Anything expected to turn into cash, or be paid, within 12 months.