💰 Working Capital Calculator

Working capital is a standard financial accounting metric representing the net liquid resources a company has available in the short term: Working Capital = Current Assets − Current Liabilities. Current assets include cash, accounts receivable, and inventory — items convertible to cash within a year — while current liabilities include accounts payable and short-term debt due within a year. For example, with current assets of $50,000 and current liabilities of $30,000, working capital is $50,000 − $30,000 = $20,000. Positive working capital means a company can cover its short-term obligations with resources to spare; negative working capital signals a need for caution on near-term solvency.

Because working capital is an absolute dollar figure, its meaning depends heavily on company size — so the standard analytical practice is to check it alongside the relative metric Current Ratio = Current Assets ÷ Current Liabilities. In the example above, the current ratio is 50,000 ÷ 30,000 = 1.67, meaning $1.67 of current assets exist for every $1 of current liabilities. A current ratio of 1 or higher is generally read as healthy short-term solvency, while below 1 signals liquidity risk — though inventory-heavy industries should also check supplementary metrics like the quick ratio.