Free Working Capital Calculator
Working capital is the cash and near-cash resources you have to run day-to-day operations. This calculator gives you working capital in dollars, plus the two liquidity ratios lenders always look at — current ratio and quick ratio — with plain-English guidance on healthy ranges.
Results
Healthy (1.5–3.0)
Healthy (1–2)
Disclaimer: This calculator provides estimates only and does not constitute financial advice. Actual loan terms may vary by lender.
What the Working Capital Calculator does
Working capital is the dollar amount left over after subtracting a business's current liabilities from its current assets — it measures the short-term cash cushion available to run operations. Current ratio and quick ratio express the same relationship as multiples rather than a dollar figure, which is what lenders quote in covenants.
Methodology and formula
Working Capital = Current Assets - Current Liabilities; Current Ratio = Current Assets / Current Liabilities; Quick Ratio = (Current Assets - Inventory) / Current Liabilities.
Worked example
- Inputs
- Current assets 180,000 (including 60,000 inventory); current liabilities 90,000.
- Result
- Working capital 90,000; current ratio 2.0; quick ratio 1.33.
A current ratio of 2.0 and quick ratio above 1.0 both signal comfortable short-term liquidity, which strengthens a business loan application because the lender sees enough liquid assets to service debt even if receivables slow down.
When to use this tool
Use this before applying for a business loan or line of credit to check your liquidity position. Use the Debt-to-Income or Loan Eligibility calculators alongside it when the lender is assessing an individual owner's personal finances too.
About the Working Capital Calculator
The formulas
Working Capital = Current Assets − Current Liabilities. Current Ratio = Current Assets / Current Liabilities. Quick Ratio = (Current Assets − Inventory) / Current Liabilities. The quick ratio strips out inventory because it can't always be converted to cash quickly.
What the numbers mean
A current ratio above 1.5 is generally healthy; below 1.0 signals a liquidity problem. Quick ratio above 1.0 is healthy — it means you can cover short-term debts without selling inventory. Extremely high ratios (above 3.0) can mean cash is sitting idle instead of being deployed.
Why lenders care
Any bank underwriting a business loan will pull your current and quick ratios first. Weak liquidity ratios push your interest rate up or get the loan declined. Fix these ratios before you apply.
Frequently asked questions
What counts as a current asset?
What counts as a current liability?
What's a healthy current ratio?
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