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📊 Business

Working Capital Calculator

Working capital measures whether a business can meet its short-term obligations. A positive working capital and current ratio above 1.5 indicate healthy liquidity. Below 1 means you may struggle to pay bills.

How to Use This Tool

  1. Enter total current assets (cash, inventory, receivables).
  2. Enter total current liabilities (payables, short-term debt).
  3. Click Calculate to see working capital, current ratio, and liquidity status.

The Formula

Working Capital = Current Assets - Current Liabilities. Current Ratio = Current Assets / Current Liabilities. Healthy ratio: >1.5.

Why It Matters

Your business has $120,000 in current assets and $80,000 in current liabilities. Your $40,000 working capital means you can cover short-term obligations comfortably. A negative number signals cash flow trouble.

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