Working Capital Calculator
Calculate working capital, current ratio, quick ratio and the cash conversion cycle from DSO, DIO and DPO using your own balance sheet figures.
A current ratio between 1.2 and 2 is the range most lenders and analysts treat as healthy for an operating business.
The cash conversion cycle is how many days cash is tied up between paying suppliers and collecting from customers. Lower is better.
Working capital is current assets minus current liabilities. Current ratio = CA ÷ CL, quick ratio = (CA − inventory) ÷ CL and cash ratio = cash ÷ CL. The cycle days use the period you selected: DSO = receivables ÷ revenue × days, DIO = inventory ÷ COGS × days, DPO = payables ÷ COGS × days, and the cash conversion cycle is DSO + DIO − DPO. Balance-sheet items are point-in-time figures, so using period-average balances gives a fairer cycle than year-end snapshots. Everything runs in your browser; no figures are uploaded. Estimates only, not financial advice.
What is the Working Capital Calculator?
Working capital is current assets minus current liabilities — the cash cushion that keeps a business paying suppliers and wages while it waits to be paid.
- Working capital, current ratio, quick ratio and cash ratio
- DSO, DIO and DPO calculated from your own period length
- Cash conversion cycle and operating cycle in days
- Working capital shown as a percentage of revenue
- Plain-English interpretation of the current ratio and cycle
- Runs entirely offline in your browser — nothing is uploaded
How to use the Working Capital Calculator
- 1
Pick the period your figures cover so the cycle days use the right day count.
- 2
Enter total current assets and total current liabilities to get working capital and the current ratio.
- 3
Add inventory and cash to see the quick ratio and cash ratio.
- 4
Enter receivables, payables, revenue and COGS for DSO, DIO, DPO and the cash conversion cycle.
- 5
Read the interpretation note under the results to see where your ratios sit.
About the Working Capital Calculator
Working capital is current assets minus current liabilities — the cash cushion that keeps a business paying suppliers and wages while it waits to be paid. This calculator turns a handful of balance-sheet lines into that figure plus the liquidity ratios lenders and investors actually look at: current ratio, quick ratio and cash ratio.
It also works out the cash conversion cycle. Enter revenue, cost of goods sold, receivables, inventory and payables and you get days sales outstanding, days inventory outstanding and days payables outstanding, then the cycle itself — how many days your cash is tied up between paying a supplier and being paid by a customer.
Choose whether your figures are annual, quarterly or monthly and the day counts adjust to match, so a quarterly balance sheet is not accidentally read as a year. A short interpretation note explains where your current ratio sits and what a negative cash cycle means. Every calculation happens in your browser and no financial data is uploaded or saved. These are estimates for planning, not financial advice.
Frequently asked questions
What is a healthy working capital ratio?
Most analysts treat a current ratio between 1.2 and 2.0 as healthy for an operating business. Below 1 means current liabilities exceed current assets and short-term obligations may need financing; far above 2 can mean cash or stock is sitting idle rather than being put to work.
What is the difference between the current ratio and the quick ratio?
The current ratio divides all current assets by current liabilities. The quick or acid-test ratio strips out inventory first, because stock can take months to convert into cash. If the two numbers are far apart, a lot of your liquidity is sitting on shelves.
How do you calculate the cash conversion cycle?
Add days sales outstanding to days inventory outstanding, then subtract days payables outstanding. DSO is receivables ÷ revenue × days, DIO is inventory ÷ COGS × days, and DPO is payables ÷ COGS × days. The result is how long cash is tied up in the operating cycle.
Can the cash conversion cycle be negative?
Yes, and it is a strong position. A negative cycle means you collect from customers before you have to pay suppliers, so growth funds itself. Large retailers and subscription businesses that bill up front frequently run one.
Should I use year-end or average balances?
Average balances give a fairer picture, because a single year-end snapshot can be flattered by a push to collect receivables in December. If you have opening and closing figures, enter the average of the two for receivables, inventory and payables.
Related tools
Inventory Turnover Calculator
Calculate inventory turnover from COGS and average inventory, plus days inventory outstanding, sell-through rate and GMROI, annualised from any period.
EOQ Calculator
Find the economic order quantity with EOQ = √(2DS ÷ H), plus orders per year, reorder point, order cycle length and total annual inventory cost.
Burn Rate & Runway Calculator
Calculate gross burn, net burn and how many months of runway your cash buys, with optional monthly revenue and expense growth modelled month by month.
Gross Profit Calculator
Calculate gross profit and gross profit margin from revenue and cost of goods sold. See profit in currency and as a percentage for pricing and reporting.
Contribution Margin Calculator
Work out contribution margin per unit, CM ratio, break-even units and the volume needed for a target profit — with a weighted multi-product sales mix.