What is working capital?

Working capital = Current Assets - Current Liabilities. It measures a company's short-term financial health and ability to cover its day-to-day obligations. Positive working capital means the company can pay its short-term debts.

What is a good current ratio?

A current ratio between 1.5 and 3.0 is generally considered healthy. Below 1.0 means liabilities exceed assets (potential trouble). Above 3.0 might indicate inefficient use of assets.

What is the quick ratio?

The quick ratio (acid-test ratio) excludes inventory from current assets because inventory may not be easily convertible to cash. Quick Ratio = (Cash + Receivables) / Current Liabilities. A ratio above 1.0 is healthy.

Why can too much working capital be bad?

Excessive working capital may mean money is sitting idle in low-return assets (Cash, excess inventory). This capital could be invested in growth, used to pay dividends, or reduce debt for better shareholder returns.

How do I improve working capital?

Strategies include: collecting receivables faster, negotiating longer payment terms with suppliers, reducing excess inventory, improving sales, or securing a short-term line of credit for seasonal cash gaps.

Working Capital Calculator

Analyze short-term financial health with current, quick, and cash ratios.

Current Assets

Cash & Equivalents

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Accounts Receivable

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Inventory

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Other Current Assets

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Total Assets₹0

Current Liabilities

Accounts Payable

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Short-Term Debt

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Accrued Expenses

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Other Liabilities

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Total Liabilities₹0

Working Capital

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Current Ratio

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Quick Ratio

Current Ratio

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Quick Ratio

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Cash Ratio

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Documentation

How It Works

Working capital measures short-term financial health. The current ratio shows overall coverage, while the quick ratio excludes hard-to-liquidate inventory for a stricter test.

Formulas

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Frequently Asked Questions

How to Use

About the Working Capital Calculator

What it calculates

This working capital calculator models key business metrics for startups and small companies. Analyze working capital, current ratio, and quick ratio.

When to use it

Use when forecasting runway, pricing, margins, or growth to support business planning.

Example

Adjust the inputs above to model your specific scenario with the Working Capital Calculator.

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Working Capital Calculator

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How It Works

Formulas

About the Working Capital Calculator

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