Working Capital Calculator
Free working capital calculator: enter current assets, current liabilities, and inventory to get working capital, the current ratio, and the quick ratio. These are the core short-term liquidity measures lenders and borrowers use across commercial lending.
How working capital and liquidity ratios work
Working capital is current assets minus current liabilities, the liquidity a business has to operate day to day. The current ratio is current assets divided by current liabilities, and the quick ratio excludes inventory as the least liquid current asset. How fast working capital cycles is captured by the cash conversion cycle. When day-to-day cash falls short, businesses use financing to close the gap, see financing the working capital gap and asset-based lending, where those current assets become collateral. To measure how quickly receivables turn to cash, use the DSO calculator.
Frequently asked questions
What is working capital?
Working capital is current assets minus current liabilities. It measures the short-term liquidity a business has to fund operations. Positive working capital means current assets cover current obligations; negative working capital can signal a cash squeeze.
What is a good current ratio?
The current ratio is current assets divided by current liabilities. A ratio above 1.0 means current assets exceed current liabilities, and many lenders look for roughly 1.2 to 2.0, though the right level varies by industry.
How is the quick ratio different?
The quick ratio, or acid-test ratio, excludes inventory before dividing by current liabilities, because inventory is the hardest current asset to convert to cash quickly. It is a stricter liquidity test than the current ratio.
Why do lenders care about working capital?
Working capital and liquidity ratios show whether a borrower can meet short-term obligations and absorb a shock. For asset-based and receivables lenders, current assets are also the collateral, so weak or declining working capital is an early warning sign.
Estimate for guidance, not a credit decision. Behind every funded facility is the servicing work Zolvo automates on top of the systems lenders already run.