Free business planning calculator
Working Capital Calculator
Calculate working capital and working capital ratio from current assets and current liabilities. Free liquidity assessment tool for small business financial health analysis.
Enter the minimum numbers needed to get a result.
Updated live as you type.
Planning estimate only. It does not include taxes, overhead allocation, depreciation, discounts, or other business-specific adjustments.
Working capital is the difference between a company's current assets and current liabilities, measuring its short-term liquidity and operational efficiency.
Formula and example
Working capital = Current assets - Current liabilities; Working capital ratio = Current assets / Current liabilities
If current assets are $50,000 and current liabilities are $30,000, working capital is $20,000 and the working capital ratio is 1.67.
Methodology & assumptions
Last updated: 2026-06-12Calculation method
Subtracts current liabilities from current assets to find working capital. The working capital ratio (also called current ratio) is assets divided by liabilities. A ratio above 1 indicates positive working capital.
Data sources
Uses the numbers you enter and standard small-business finance formulas. Benchmark comparisons use HustleFin industry benchmark pages where available.
Limitations
Snapshot measurement — does not account for timing of cash flows, seasonal variations, or the quality of receivables. A high ratio may also indicate inefficient asset use.
Input definitions
- Current assets: Cash, accounts receivable, inventory, and other assets convertible within one year.
- Current liabilities: Accounts payable, short-term debt, and other obligations due within one year.
Frequently asked questions
What is working capital?+
Working capital is the money available to meet short-term obligations. It equals current assets minus current liabilities.
What is a good working capital ratio?+
A ratio between 1.2 and 2.0 is generally healthy. Below 1.0 suggests liquidity risk. Above 2.0 may mean idle resources.
How can I improve working capital?+
Speed up receivables collection, extend payables, reduce inventory levels, or secure a line of credit for short-term gaps.
Is working capital the same as cash flow?+
No. Working capital is a snapshot of assets and liabilities at a point in time. Cash flow tracks money moving in and out over a period.
Related guides
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