Net Working Capital = Current Assets − Current Liabilities Current Ratio = Current Assets ÷ Current Liabilities Healthy: Ratio ≥ 1.5 | Adequate: 1.0–1.5 | Tight: < 1.0
Worked Example
Scenario: Cash ₹5L, Debtors ₹30L, Inventory ₹20L, Creditors ₹15L, ST Loans ₹5L, Other CL ₹3L.
CA = ₹55L | CL = ₹23L | NWC = ₹32L | Ratio = 2.39x (Healthy)
When to Use This Calculator
Monthly liquidity check before committing to payments
Present working capital position to bank for OD limit
Calculate impact of large orders on working capital
Compare working capital trend quarter-on-quarter
Prepare balance sheet for audit or investor review
Frequently Asked Questions
Working capital = Current Assets − Current Liabilities. It measures the short-term liquidity available to fund daily operations.
A current ratio (Current Assets ÷ Current Liabilities) of 1.5–2.0 is generally healthy. Below 1.0 means liabilities exceed liquid assets.
Cash, bank balance, accounts receivable (debtors), inventory, and short-term investments due within 12 months.
Accounts payable (creditors), short-term loans, outstanding expenses, and GST/TDS dues payable within 12 months.
Speed up collections (reduce DSO), negotiate longer supplier credit, reduce inventory levels, and avoid paying creditors early.
