Small-business finance
Working capital and liquidity
Calculate net working capital, current ratio and quick ratio from matching balance-sheet amounts.
Your inputs
Complete the fields for your selected method. Zero means intentionally zero, not unknown. Currency selection labels amounts; it does not convert exchange rates.
How this calculation works
working capital = current assets - current liabilities; current ratio = current assets / current liabilities; quick ratio = (current assets - inventory - prepaid expenses) / current liabilities
Use the same balance-sheet date and accounting basis. Include only current assets and current liabilities, including current portions of debt where applicable. The quick-ratio definition here excludes inventory and prepaid expenses. Working capital is not cash on hand, profit or a cash-flow forecast. Ratios do not establish credit eligibility or an appropriate target for your business.
What information do I need?
Use records for the same job, equipment or accounting period. Only the fields for your selected entry method are required. An unknown amount is not zero.
Input definitions and where to find them
- Total current assets (selected currency): Use total current assets from a balance sheet for one date: cash, receivables, inventory and other assets classified as current. Inventory and prepaid inputs below must already be included in this total.
- Total current liabilities (selected currency): Use current liabilities at the same balance-sheet date, including accounts payable and current debt portions as classified in your records.
- Inventory included in current assets (selected currency): Enter the inventory already included in current assets. Use 0 only if there is none, not if unknown.
- Prepaid expenses included in current assets (selected currency): Enter prepaid expenses already included in current assets. This worksheet excludes them in its quick-ratio definition.
Use the Where to find this value controls beside the inputs for available work-it-out helpers. Estimates remain your assumptions; a helper does not verify the source figures.
Worked example
Example amounts use US dollars (USD).
Example answer: Net working capital is $20,000.00 for the illustrative inputs below.
Example inputs
- Total current assets: $50,000.00
- Total current liabilities: $30,000.00
- Inventory included in current assets: $12,000.00
- Prepaid expenses included in current assets: $3,000.00
- Net working capital
- $20,000.00
- Current ratio
- 1.6667 to 1
- Quick ratio
- 1.1667 to 1
- Quick assets on the stated definition
- $35,000.00
These illustrative values are not recommended rates or industry averages. Replace every example input with your own figures.
Use the result well
Calculate net working capital, current ratio and quick ratio from matching balance-sheet amounts.
Keep inputs on the same scope and time basis. Calculations retain precision internally; displayed values generally round to two decimal places, with extra precision for very small values and whole-unit rounding where required. Economic comparisons describe your supplied assumptions and do not guarantee future results.
This tool provides business arithmetic. It does not approve engineering designs, establish legal or tax treatment, select equipment or certify safe operating conditions.