About the Working Capital Calculator
What is the Working Capital Calculator?
Working capital is the money tied up in running the business day to day. This working capital calculator subtracts current liabilities from current assets and shows the liquidity ratios banks look at.
It also shows operating working capital – receivables plus inventory minus payables – the part of working capital that grows as sales grow.
How to use the Working Capital Calculator
- Cash & Bank Balances (₹) (sample: 6,00,000)
- Trade Receivables (₹) (sample: 14,00,000)
- Inventory (₹) (sample: 11,00,000)
- Other Current Assets (₹) (sample: 2,00,000)
- Trade Payables (₹) (sample: 10,00,000)
- Short-Term Borrowings & Current Loan Instalments (₹) (sample: 5,00,000)
- Other Current Liabilities (₹) (sample: 3,00,000)
- Press Calculate Working Capital (results also refresh as you type). The result card shows the Net Working Capital, along with Current assets, Current liabilities, Current ratio and Quick ratio.
Formula used
Net working capital = Current assets − Current liabilities
- Current ratio = current assets ÷ current liabilities
- Quick ratio = (current assets − inventory) ÷ current liabilities
Include the next 12 months of loan instalments in current liabilities.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Cash & Bank Balances (₹) | 6,00,000 |
| Trade Receivables (₹) | 14,00,000 |
| Inventory (₹) | 11,00,000 |
| Other Current Assets (₹) | 2,00,000 |
| Trade Payables (₹) | 10,00,000 |
| Short-Term Borrowings & Current Loan Instalments (₹) | 5,00,000 |
| Other Current Liabilities (₹) | 3,00,000 |
| Result | Value |
|---|---|
| Net Working Capital | ₹15,00,000 |
| Current assets | ₹33,00,000 |
| Current liabilities | ₹18,00,000 |
| Current ratio | 1.83× |
| Quick ratio | 1.22× |
| Operating working capital (receivables + inventory − payables) | ₹15,00,000 |
Tips for using the Working Capital Calculator
- Banks typically fund working capital up to 75% of the gap, expecting a current ratio of at least 1.33.
- Negotiate longer supplier credit and shorter customer credit to free up working capital.