Working Capital Calculator
Working Capital
Calculate net working capital and working capital ratio
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Detailed Working Capital
Break down current assets and liabilities for detailed analysis
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Formula
Working Capital = Current Assets - Current Liabilities | Working Capital Ratio = Current Assets / Current Liabilities
Frequently Asked Questions
What is working capital?
Working capital is Current Assets minus Current Liabilities. It measures a company's short-term liquidity and ability to pay near-term obligations. Positive working capital means the company can cover its short-term debts.
What is a good working capital ratio?
A ratio between 1.5:1 and 2:1 is generally considered healthy. Below 1:1 means liabilities exceed assets (risk of insolvency). Above 2:1 might mean assets are not being used efficiently. Industry norms vary.
How can I improve working capital?
Collect receivables faster, negotiate longer payment terms with suppliers, reduce excess inventory, use short-term financing strategically, improve cash flow management, and renegotiate unfavorable loan terms.
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