Cash flow & operations
Working capital: can the business pay what's due this year?
A working capital calculator: owners enter current assets and current liabilities to see working capital, the current ratio and a plain-language assessment.
Included on every plan, even the free Practitioner plan. No card needed.
How do you calculate working capital?
Subtract current liabilities from current assets. Positive working capital means short-term assets exceed short-term obligations. The current ratio divides the two; a ratio of 1.5 means $1.50 of current assets for every $1 due within a year. Healthy levels vary by industry.
During growth, when cash gets tied up
Growing businesses discover that more sales mean more receivables and inventory, and cash disappears. Owners search when the bank asks about liquidity or when growth starts to feel like a squeeze.
What the client types into a search box
“how much working capital does my business need”
How a client works through it
Enter current assets
Cash, receivables, inventory and other assets due within a year.
Enter current liabilities
Payables, short-term debt and accruals due within a year.
See working capital
The difference and the current ratio.
Read the assessment
A plain-language indication of liquidity.
What lands in your inbox
When a client asks your firm to review the result, the request arrives as a contact record with their inputs and results attached, by email and, on paid plans, by webhook to your CRM.
Received
Current assets and liabilities show liquidity. A ratio near or below 1 suggests urgent cash management or financing; a very high ratio may mean idle cash that could be invested.
Working capital and the current ratio
Working Capital is the dollar cushion. Current Ratio is the relative measure lenders prefer. Assessment gives a general reading, which should be compared with industry norms.
A strong ratio built on slow-paying receivables or stale inventory is weaker than it looks.
Results shown: Working Capital · Current Ratio · Assessment.
Why working capital is a CFO-level conversation
Working capital connects growth, cash and financing. Firms that help owners manage it, by tightening collection terms, inventory and payables, free up cash without borrowing.
It's a quick, credible first deliverable for fractional CFOs.
Follow-ups this request opens
- Analyze receivables and payables timing
- Set inventory targets
- Arrange working capital financing
- Invest excess cash appropriately
What this calculator leaves out
- General assessment, not industry-specific.
- Quality of receivables and inventory not assessed.
- Single point in time.
- No quick ratio.
Platform disclaimer shown under the calculator: Estimates only. Healthy ratios vary by industry. Use alongside full financial statements.
Compliance note for firms
Liquidity assessments shared with lenders should be based on reliable statements; present the calculator's assessment as general guidance only.
Not legal advice. See our disclaimer and the guide to compliance for client calculators.
Terms your client sees in the calculator
These definitions appear in the calculator's collapsible Definitions block, so clients don't have to call to ask what a label means.
- Working capital
- Current assets minus current liabilities: the cushion of short-term resources left after covering obligations due within a year. Positive working capital means the business can meet near-term bills from near-term resources; negative working capital means it depends on new cash, credit or faster collections to do so.
- Current ratio
- Current assets divided by current liabilities. A ratio above 1 means short-term assets exceed short-term obligations; below 1 means they fall short. What counts as healthy varies considerably by industry, so it is most useful compared against similar businesses and against the company’s own trend over time.
- Current assets
- Cash and other resources expected to be converted to cash or used up within a year, including accounts receivable, inventory, short-term investments and prepaid expenses. Take the figure from the current-assets total on the balance sheet. Not all of it is equally liquid; inventory can take much longer to turn into cash than receivables.
- Current liabilities
- Obligations due within a year, such as accounts payable, accrued wages and taxes, short-term loans and the current portion of long-term debt. Take the figure from the current-liabilities total on the balance sheet. Including the next twelve months of loan principal matters; leaving it out overstates working capital.
- Liquidity
- How readily a business can meet its short-term obligations with cash or assets that can quickly become cash. Working capital and the current ratio are two of the most common liquidity measures, and lenders and investors check them. A business can be profitable and still run short of liquidity if cash is tied up in receivables or inventory.
- Accounts receivable
- Money customers owe for goods or services already delivered, counted in current assets. It supports working capital only if it is actually collected; old or doubtful receivables overstate liquidity. Collecting faster turns receivables into cash and can improve the cash position without changing the working capital total.
In our glossary: Working capital · Current ratio
Working Capital calculator: questions from firms and clients
What's a healthy current ratio?
Often 1.2 to 2, depending on the industry.
Can working capital be too high?
Yes, idle cash or excess inventory.
What's included in current assets?
Cash, receivables, inventory and prepaid items due within a year.
Do lenders care?
Yes, many covenants use the current ratio.
How do I improve it?
Collect faster, manage inventory, extend payables sensibly.
Is the quick ratio included?
No; it excludes inventory and is stricter.
How often should I check?
Monthly.
Which plan includes it?
Every plan, including the free Practitioner plan, which runs up to 5 calculators at once alongside the other business tools. Firm (up to 50) and Network (no cap) add webhooks and white-label. See pricing.
No question matches that filter. Clear it to see them all, search the whole site, or ask us directly; we reply within one business day.
Clients who ask this usually ask next
Financial Ratios
what ratios do banks look at for a business loan
Cash Flow Budget
how do I make a cash flow budget for my business
Inventory Analysis
is my inventory turnover good
All “Cash flow & operations” calculators · Everything in Business
Next entry
Answer the July question before the client calls
Embed the Working Capital calculator on your firm's site in an afternoon and receive requests with the numbers already filled in.
Firm and Network plans include a 14-day trial. Cancel before it ends and you pay nothing.