Working Capital Calculator
Working capital is what a business has left after covering everything it owes in the next year. Lenders and suppliers use it, and the ratios built on it, to judge short-term financial health.
Enter your figures below. Results update as you type.
Working capital$60,000.00Current ratio 1.5
- Short of cover under 1
- Thin 1-1.5
- Healthy 1.5+
- Current ratio
- 1.5
- Quick ratio (without inventory)
- 1.08
- Liabilities covered
- 150%
How the Working Capital calculation works
Working capital = current assets - current liabilities; current ratio = current assets / current liabilities
Current assets of $180,000 against current liabilities of $120,000 leave $60,000 of working capital and a current ratio of 1.5. Taking out $50,000 of inventory gives a quick ratio of 1.08.
Frequently asked questions
What is a good current ratio?
Between 1.5 and 3 is generally considered healthy. Below 1 means short-term debts exceed short-term assets. A very high ratio can mean cash or stock is sitting idle.
What is the difference between the current ratio and the quick ratio?
The quick ratio leaves out inventory, because stock may be slow to turn into cash. It is the stricter test of whether a business can pay its bills.
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