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Working capital calculator

Compute working capital and the working-capital ratio from current assets and liabilities.

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Enter Current assets, Current liabilities and the Working capital calculator works out Working capital, Working-capital ratio straight away. For instance, with Current assets = $100,000.00 and Current liabilities = $60,000.00 it returns Working capital = $40,000.00 and Working-capital ratio = 1.667.

How to use it

  1. Enter your values: Current assets, Current liabilities.
  2. Read the result instantly: Working capital, Working-capital ratio.
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Frequently asked questions

What does the Working capital calculator actually compute?

It takes Current assets and Current liabilities and derives Working capital and Working-capital ratio from them. The calculation is live as you type, so the result updates on every change.

What information do I need to provide?

2 values: Current assets ($) and Current liabilities ($). Nothing else is required — no account, no file upload.

Can you show a worked example?

With Current assets = $100,000.00 and Current liabilities = $60,000.00, the calculator returns Working capital = $40,000.00 and Working-capital ratio = 1.667. Those figures come from running this exact tool, so you can reproduce them by entering the same values.

What happens if I enter larger values?

It moves a lot. Using Current assets = $200,000.00 and Current liabilities = $120,000.00 instead, Working capital goes from $40,000.00 to $80,000.00 — which is why it is worth testing a few scenarios rather than trusting a single figure.

What does it give for smaller values?

Scaled down to Current assets = $50,000.00 and Current liabilities = $30,000.00, Working capital comes out at $20,000.00. The relationship is worth checking at both ends before you rely on a single result.

When would I actually use this?

Running the week: issuing an invoice or a quote, knowing what is in stock and what to reorder, and seeing whether cash covers what is due.

What is the most common mistake?

Reading profit as cash. A profitable month with sixty-day payment terms can still leave the account empty — the two numbers answer different questions.

What is the difference between the Working capital calculator and the Capital employed calculator?

This one returns Working capital and Working-capital ratio; the Capital employed calculator returns Capital employed and ROCE. That is the whole difference — open the one whose figure you need.

Is there a tool for the next step?

Current ratio calculator is the closest one after this: Compute the current ratio from current assets and current liabilities.

What else is worth having open alongside it?

Quick ratio calculator and Return on net assets calculator — they come up in the same task often enough to be worth a second tab.

Further reading

All guides →
ExplainerFifty Thousand of Working Capital, and None of It SpendableCurrent assets of 150,000 less current liabilities of 100,000 gives working capital of 50,000 and a ratio of 1.5. Whether that is comfortable depends on what the 150,000 is made of.ComparisonCurrent Ratio vs Quick Ratio, and What Neither Tells YouThe quick ratio removes inventory because inventory is the current asset that may not convert. Two companies with an identical current ratio can be five times apart on the quick ratio — and both measures are still blind to the one thing that actually stops a company paying: timing.ExplainerFifty-Five Days to Get Paid on Thirty-Day Terms180,000 outstanding against 1,200,000 of annual sales is 54.75 days of collection and 6.67 turns a year. On thirty-day terms, that gap is a quarter of a million financed for free.ExplainerGrowing a Business That Earns Less Than Its Capital Costs5 million of operating profit on 20 million of capital employed is a 25 % return. Against a cost of capital of 8 % that is a spread of 17 points; at 6 % it would be a spread of −2, and every extra euro invested would destroy value.ExplainerOne Balance Sheet, Three Ratios, and Only One of Them Has a Ceiling500,000 of liabilities against 1,200,000 of assets is 41.7 % debt, 58.3 % equity and a debt-to-equity of 0.71. The third one runs to infinity as the equity vanishes; the first cannot pass 100 %.ExplainerReturn on Assets: What the Ratio Says About a Business, and What It HidesReturn on assets, return on net assets and return on capital employed are one family with two moving parts. On the same balance sheet they read 8.3%, 10.2% and 15.6% — and the two steps between them are exactly the two decisions you are making.
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