Working Capital Calculator
Computes current assets minus current liabilities to assess short-term financial health
Current assets minus current liabilities
Current assets divided by current liabilities
Whether the business has positive or negative working capital
Frequently Asked Questions
What is working capital?
Working capital is current assets minus current liabilities. It represents the money available for day-to-day operations. Positive working capital means the business can fund its current operations and invest in future growth.
How much working capital do I need?
Most businesses need enough working capital to cover 2-3 months of operating expenses. The exact amount depends on your industry, payment cycles, and seasonality. Businesses with long receivable cycles need more working capital.
What causes negative working capital?
Negative working capital means current liabilities exceed current assets. It can result from rapid growth outpacing cash collection, taking on too much short-term debt, seasonal downturns, or poor accounts receivable management.
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