Working Capital Calculator
Calculate working capital and the current ratio from your current assets and current liabilities to check short-term financial health.
Your results
Calculation breakdown
- Working capital
- Current assets − Current liabilities
- Current ratio
- Current assets ÷ Current liabilities
Worked example
A business with $120,000 current assets and $80,000 current liabilities has $40,000 working capital and a current ratio of 1.5:1.
Assumptions
- Current assets and liabilities should only include items due or convertible within twelve months.
- A ratio below 1 can signal short-term liquidity pressure.
- This is a point-in-time snapshot and can change quickly.
How this calculator works
Subtract current liabilities from current assets to calculate working capital, and divide the two to get the current ratio, both common measures of a business's short-term liquidity.
Frequently asked questions
What counts as a current asset?
Cash, accounts receivable, and stock expected to convert to cash within twelve months.
What counts as a current liability?
Debts and obligations due within twelve months, such as accounts payable, short-term loans and tax owing.
What current ratio is considered healthy?
A ratio above 1 generally means current assets exceed current liabilities, though the ideal level varies by industry.
Results are estimates only and are not financial, tax, legal or credit advice.