Measure short-term financial health from your balance sheet. Enter current assets and current liabilities as two totals or line by line to get net working capital and the three liquidity ratios lenders look at: the current ratio, the quick (acid-test) ratio and the cash ratio.
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Entry mode
Current assets
$
$
$
Short-term investments.
$
$
$
$
Current liabilities
$
$
$
Credit lines, short-term loans, notes payable.
$
Wages, taxes, interest owed.
$
$
Deferred revenue, customer deposits, etc.
Enter your values to see the result.
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How to use the Working Capital Calculator
Choose totals or itemized entry, depending on how detailed your balance sheet is.
Enter current assets: cash, marketable securities, receivables, inventory and prepaid expenses.
Enter current liabilities: payables, short-term debt, accrued expenses and the current portion of long-term debt.
Read net working capital and the current, quick and cash ratios with their interpretation.
Download the ratio table as CSV or copy the results for a report.
Working capital and liquidity ratio formulas
Net working capital = Current assets − Current liabilities
Current ratio = Current assets ÷ Current liabilities
Quick ratio = (Cash + Marketable securities + Accounts receivable) ÷ Current liabilities, or (Current assets − Inventory − Prepaid expenses) ÷ Current liabilities
Cash ratio = (Cash + Marketable securities) ÷ Current liabilities
Example: current assets of $240,000 (cash $40,000, securities $10,000, receivables $85,000, inventory $95,000, prepaid $8,000, other $2,000) and current liabilities of $130,000 give working capital of $110,000, a current ratio of 1.85, a quick ratio of $135,000 ÷ $130,000 = 1.04 and a cash ratio of $50,000 ÷ $130,000 = 0.38.
What goes in each line
Current assets (due within 12 months)
Current liabilities (due within 12 months)
Cash and cash equivalents
Accounts payable to suppliers
Marketable securities and short-term deposits
Short-term loans, credit lines, notes payable
Accounts receivable (net of bad-debt allowance)
Accrued wages, taxes and interest
Inventory (raw materials, work in progress, finished goods)
Current portion of long-term debt and leases
Prepaid expenses (rent, insurance paid in advance)
Deferred revenue and customer deposits
Reading the ratios together
A strong current ratio with a weak quick ratio usually means much of the working capital is tied up in inventory. A falling cash ratio with steady working capital can mean customers are paying more slowly. Track the ratios over several periods and alongside the cash conversion cycle: liquidity is about the timing of cash, not only the balance-sheet totals.
Frequently asked questions
What is the working capital formula?
Net working capital = current assets − current liabilities. Current assets are those expected to turn into cash within a year (cash, receivables, inventory); current liabilities are obligations due within a year (payables, short-term debt, accrued expenses).
What is a good current ratio?
A current ratio (current assets ÷ current liabilities) between about 1.5 and 3 is often described as comfortable, and below 1 means current liabilities exceed current assets. The right level depends on the industry: grocers and restaurants with fast cash cycles often run lower ratios safely.
How is the quick ratio different from the current ratio?
The quick or acid-test ratio leaves out inventory and prepaid expenses, which are harder to turn into cash quickly. Quick ratio = (cash + marketable securities + accounts receivable) ÷ current liabilities. A value of 1 or more means liquid assets alone cover current liabilities.
What is the cash ratio?
The cash ratio is the strictest liquidity test: (cash + marketable securities) ÷ current liabilities. It ignores receivables and inventory. Few healthy companies keep it at 1, because holding that much cash is expensive.
Can working capital be negative?
Yes. Negative working capital means current liabilities are larger than current assets. It can signal liquidity trouble, but some businesses, such as subscription companies or retailers that collect cash before paying suppliers, operate with negative working capital by design.
What is operating working capital?
Operating (non-cash) working capital excludes cash and securities from assets and interest-bearing debt from liabilities: (current assets − cash − securities) − (current liabilities − short-term debt − current portion of long-term debt). It shows how much money is tied up in day-to-day operations.
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