Working Capital Calculator

A quick read on short-term financial health

Working capital measures whether a business currently has enough short-term resources on hand to cover its short-term obligations - it is one of the clearest early indicators of potential cash flow trouble, even for a company that looks profitable on paper.

Worked example

For a business with $150,000 in current assets and $90,000 in current liabilities:

Working Capital = 150000 - 90000 = 60,000 (Positive - short-term obligations are covered)

Frequently asked questions

What does negative working capital mean? It signals that current liabilities exceed current assets, meaning the business may struggle to meet its near-term obligations without raising additional cash, extending payment terms, or liquidating other assets.

Is more working capital always better? Not necessarily - extremely high working capital can also indicate inefficiently deployed cash, excess inventory, or slow-collecting receivables that could otherwise be reinvested productively into the business.