Working Capital Calculator
Calculate your working capital, current ratio, and quick ratio — and understand whether your business has a liquidity problem.
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How this calculator works
Working capital = Current assets − Current liabilities. It's the short-term financial cushion of your business. The current ratio (current assets ÷ current liabilities) should ideally be 2:1. The quick ratio (liquid assets ÷ current liabilities, excluding inventory) should be at least 1:1. These ratios are used by banks to assess creditworthiness.
Working capital = (Cash + Receivables + Inventory) − (Payables + Short-term loans) | Current ratio = Current assets ÷ Current liabilities | Quick ratio = (Cash + Receivables) ÷ Current liabilities
Last updated: March 2026 · Rates and slabs updated for FY 2025-26
Current ratio < 1 is a red flag
A current ratio below 1 means current liabilities exceed current assets — you may not be able to pay short-term obligations.
Collect faster, pay slower
Improve working capital by reducing Days Sales Outstanding (DSO) and increasing Days Payable Outstanding (DPO) — collect faster, pay later.
Banks use this for loans
When applying for a working capital loan or CC limit, banks will calculate these ratios. A ratio of 1.33:1 is typically the minimum for MSME loans.
Frequently Asked Questions
A current ratio below 1 means current liabilities exceed current assets — you may not be able to pay short-term obligations.
Improve working capital by reducing Days Sales Outstanding (DSO) and increasing Days Payable Outstanding (DPO) — collect faster, pay later.
When applying for a working capital loan or CC limit, banks will calculate these ratios. A ratio of 1.33:1 is typically the minimum for MSME loans.