Working Capital Calculator
Key takeaways
- ₹25.00 L of current assets stand against ₹15.00 L of current liabilities — ₹10.00 L of working capital after every short-term obligation.
- Each ₹1 due within the year is matched by ₹1.67 of current assets; 40% of the asset base is free of short-term claims.
- If current liabilities rose to ₹20.00 L, the ratio would move to 1.25× and working capital to ₹5.00 L.
Current assets vs current liabilities
Both bars are sums entered above. The gap between them is the working capital in the result card; when the liabilities bar is the longer one, that figure is negative.
Current ratio — assets due in, per ₹1 due out
Below 1.0× the liabilities due within the year exceed the assets available to meet them. The ticks mark 1× and 2× coverage.
About the Working Capital Calculator
The Working Capital Calculator compares what a business can turn into cash within about a year against what it owes within that same year. It reports the difference in rupees, the same comparison as a coverage multiple, and what share of the current assets is not already spoken for.
Enter current assets — cash, bank balances, receivables, inventory and anything else convertible to cash within roughly a year — and current liabilities — payables, short-term borrowings, accrued expenses and anything else falling due in that period. Both figures come off the same balance sheet, at the same date; this is a snapshot, not a projection, which is why there is no schedule on this page.
"Working capital" is current assets minus current liabilities, and it is signed: a negative figure means the short-term obligations exceed the assets available to meet them. "Current ratio" is the same comparison expressed as assets ÷ liabilities. "Working capital as % of assets" states how much of the current-asset base the difference represents. The bar chart puts the two entered totals on one scale so the gap between them is visible, and the scale below places the current ratio on a 0–3× axis with neutral gradation ticks at 1× and 2× coverage.
What level of working capital or current ratio suits a business depends on its industry, its cash-conversion cycle, its seasonality and its financing arrangements — a supermarket chain and a heavy-equipment manufacturer read the same ratio completely differently. This page computes the figures from what you enter and marks where 1× and 2× coverage fall on the scale; it does not assess the result, and nothing here is an evaluation of a business or a recommendation.
Frequently asked questions
How is working capital calculated?
Working capital = Current assets − Current liabilities. Both are balance-sheet totals as at one date. The result is signed: when current liabilities are the larger figure, working capital is negative, and the page shows it that way rather than flooring it at zero.
What counts as a current asset or a current liability?
Current assets are items expected to be realised in cash within the operating cycle or about twelve months — cash and bank balances, trade receivables, inventory, short-term investments, prepaid expenses. Current liabilities are obligations due in that same window — trade payables, short-term borrowings and the current portion of long-term debt, accrued expenses, taxes and dues payable.
What is the current ratio?
Current assets ÷ Current liabilities, expressed as a multiple. A ratio of 1.67× means there is ₹1.67 of assets due to be realised within the year for every ₹1 falling due in it. It is the same comparison as working capital, just as a proportion rather than a rupee amount, which makes it comparable across businesses of different sizes.
Why does the current ratio show "—"?
Because current liabilities are exactly zero, and a coverage multiple needs something to cover — dividing by zero would produce infinity, not an answer. Working capital itself is still computed in that case and simply equals the current assets. The same applies in reverse to "Working capital as % of assets", which shows "—" when current assets are zero.
What does negative working capital mean?
It means the liabilities falling due within the year are larger than the assets expected to be realised within it, as recorded on the date the figures come from. Some business models run there routinely — retailers and subscription businesses that collect from customers before paying suppliers — and others cannot. Reading it requires the context of the business, which is why this page reports the figure rather than interpreting it.
Is the current ratio the same as the quick ratio?
No. The quick (or acid-test) ratio excludes inventory and prepaid expenses from the numerator, on the basis that they are the slowest current assets to convert to cash. This calculator computes the current ratio on the full current-asset figure you enter; to approximate a quick ratio, enter current assets net of inventory and prepayments instead.
Disclaimer: This calculator is for information and education only. It is not investment advice and not a recommendation, and it is not business or accounting advice. The figures follow from the prices, costs, rates and volumes you entered, and actual results vary. Every figure is computed solely by applying the formula and assumptions stated on this page to the inputs you entered.