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Working Capital Calculator

Written by:
PK

Below is a working capital calculator. See how much a company has to immediately invest in its business and growth by netting our current assets and current liabilities.

Working Capital Calculator

What is a company's working capital?

Working capital is the short-term funds a company can use to fund its day-to-day operations or dedicate to growth. It is computed by netting out the current assets and current liabilities on a company's balance sheet. It's closely linked to the current ratio or working capital ratio, which shows the proportion of current assets and liabilities.

Negative working capital is when current liabilities are higher than current assets. It's not necessarily a bad situation portending doom – companies that turn over inventory extremely quickly and have good payment terms on inputs can show persistent negative working capital.

Working Capital Formula

The working capital formula is:

working\ capital=current\ assets-current\ liabilities

Where:

  • Current Assets – Short-term assets listed on the company's balance sheet
  • Current Liabilities – Short-term liabilities listed on the balance sheet

Other Liquidity Calculators

Liquidity ratios and calculations help estimate how a company can deal with its short term debt and liabilities. See other tools here:

      

PK

PK started DQYDJ in 2009 to research and discuss finance and investing and help answer financial questions. He's expanded DQYDJ to build visualizations, calculators, and interactive tools.

PK is in his mid-30s and works and lives in the Bay Area with his wife, two kids, and dog.

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