Working Capital Calculator

Profit on paper is not cash in the account

A month that looks fine on the income statement can still bounce payroll if invoices have not cleared and suppliers want payment now. Working capital is the gap between what you can convert to cash this year and what you must pay this year. When that gap is negative, you are technically short of liquidity even if last quarter was "profitable."

Current assets = cash + receivables + inventory
Current liabilities = payables + short-term debt
Net working capital = current assets - current liabilities
Current ratio = current assets / current liabilities
Quick ratio = (cash + receivables) / current liabilities

Defaults: $45,000 cash, $28,000 receivables, $15,000 inventory, $22,000 payables, $12,000 short-term debt. Assets = $88,000. Liabilities = $34,000. NWC = $54,000. Current ratio = 2.59x. Quick ratio = 2.15x. The assessment calls that strong coverage because assets are more than twice liabilities.

Current ratio vs acid-test, and zero liabilities

Current ratio treats inventory as if it will sell on schedule. The quick (acid-test) ratio does not. A warehouse full of slow SKUs can print a 2.5x current ratio and a 0.8x quick ratio. Lenders watch both. If you sell software with no inventory, the two numbers converge.

If payables and short-term debt are both $0, division by zero is undefined. This page does not invent a fake ratio. It prints Infinite / Zero Liabilities for both current and quick, and the assessment says there are no short-term liabilities on the books. Formula-wise the engine still holds the raw asset totals so copy can show the cash and receivable stack.

Negative NWC and what to do next

When NWC is below $0, the primary figure uses rose text (`text-rose-600` / `dark:text-rose-400`), the pill reads Negative NWC, and a `role="alert"` banner states that short-term obligations exceed assets you can convert this year. Zero NWC is also a red pill: you have no buffer if a customer pays late. Raise cash, collect receivables, cut inventory you cannot sell, or refinance short-term debt into a longer note.

This is a snapshot, not a 13-week cash forecast. It will not time a tax payment or a seasonal inventory build. Use it as the weekly check that accounting profit has not drifted away from the bank. Copy exports all five inputs, both totals, NWC, both ratios, and the assessment sentence. Pair liquidity pressure with the Startup Runway Calculator if the issue is burn, or with the Break-Even Calculator if the issue is unit economics.

Frequently Asked Questions (FAQ)