Working Capital Calculator
Free working capital calculator: enter current assets, current liabilities, and inventory to get working capital, current ratio, and quick ratio instantly.
Cash, receivables, inventory, and other assets convertible within a year.
Payables, accrued expenses, and debt due within a year.
Included in current assets; excluded from the quick ratio.
Results
Working capital
$100,000
- Current ratioA range of roughly 1.5–2.0 is commonly cited as healthy.
- 1.67
- Quick ratioExcludes inventory. Above 1.0 is commonly cited as comfortable.
- 1.27
With $100,000 of working capital and a current ratio of 1.67, you hold 1.67 dollars of short-term assets for every dollar of short-term obligations.
Free and instant - nothing is stored or sent. Estimates for planning purposes, not accounting, tax, or investment advice.
Working capital is the money your business has available to operate day to day - what is left of your short-term assets after covering short-term obligations. It is the single fastest read on whether a business can pay its bills without borrowing.
Enter three balance-sheet numbers and this calculator returns working capital in dollars plus the two ratios lenders and buyers check first: the current ratio and the quick ratio (which strips out inventory, the least liquid current asset).
What working capital measures
Working capital = current assets − current liabilities. It is the buffer between what you own that turns into cash within a year and what you owe within a year. Positive working capital means routine obligations are covered by routine resources; negative working capital means you are financing operations with someone else’s patience.
Working capital is also the cash trapped in your operating cycle: every dollar sitting in receivables and inventory is a dollar you have earned but cannot spend yet.
Current ratio vs. quick ratio
The current ratio (current assets ÷ current liabilities) counts everything, including inventory. A range of roughly 1.5–2.0 is commonly cited as healthy for most SMBs - enough cushion without hoarding unproductive cash.
The quick ratio removes inventory before dividing, because inventory can take months to convert to cash and may sell below book value under pressure. A quick ratio above 1.0 is commonly cited as comfortable: you can cover every near-term obligation without selling a single unit.
With the defaults - $250,000 of current assets, $150,000 of current liabilities, $60,000 of inventory - working capital is $100,000, the current ratio is 1.67, and the quick ratio is 1.27.
How to interpret the result
A ratio below 1.0 in either measure is a warning: obligations due within a year exceed the resources available to meet them. The levers, in order of speed, are collecting receivables faster, negotiating longer payment terms with vendors, and converting slow inventory to cash.
Very high ratios are not automatically good either - a current ratio above 3.0 often signals cash sitting idle or inventory piling up. Working capital should be sufficient, not maximal.
Frequently asked questions
What is a good working capital ratio?
A current ratio of roughly 1.5–2.0 is commonly cited as healthy for most small businesses, with a quick ratio above 1.0. But industry norms differ - grocery and subscription businesses run leaner because cash arrives before bills are due, while wholesalers carrying inventory need more cushion.
Can working capital be negative and the business still healthy?
Occasionally, yes. Businesses that collect cash before paying suppliers - some subscription and retail models - can operate with structurally negative working capital. For most SMBs, though, negative working capital means near-term bills exceed near-term resources and deserves immediate attention.
What counts as a current asset or current liability?
Current assets convert to cash within twelve months: cash, accounts receivable, inventory, and prepaid expenses. Current liabilities come due within twelve months: accounts payable, accrued wages and taxes, deferred revenue, and the current portion of any loans.
How do I increase working capital without borrowing?
Speed up the cash conversion cycle: invoice immediately, tighten payment terms or offer small early-payment discounts, chase overdue receivables weekly, reduce slow-moving inventory, and negotiate longer terms with suppliers. Each of those moves cash into the "current" window sooner.
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