# What is my working capital?

Computes working capital, current assets minus current liabilities, and the current ratio.

- Page: https://www.acalculator.org/finance/working-capital-calculator
- JSON spec: https://www.acalculator.org/finance/working-capital-calculator.json
- Version: 9cb1e89afd54

## Default answer

Example with the default inputs (Current assets $200,000.00, Current liabilities $100,000.00): Current assets of $200,000.00 less current liabilities of $100,000.00 leave working capital of $100,000.00.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| ca | Current assets | Cash, receivables, inventory and other assets expected to turn into cash within a year. |
| cl | Current liabilities | Bills, wages, short-term loans and other debts due within a year. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| wc | Working capital | Current assets − current liabilities. Negative when the debts due are larger. |
| ratio | Current ratio | Current assets ÷ current liabilities. |

## Method

Working capital = current assets − current liabilities. Current ratio = current assets ÷ current liabilities (no ratio when the liabilities are $0).

## Assumptions

- Both amounts come from the same balance sheet.
- Arithmetic is exact on the typed decimals; money shows to the cent and the ratio to 2 decimals, halves up.

## Worked examples

1. ca = $200,000.00, cl = $100,000.00 gives wc = $100,000.00, ratio = 2. Source: U.S. Securities and Exchange Commission, Beginners' Guide to Financial Statements (working capital = current assets − current liabilities). https://www.sec.gov/about/reports-publications/beginners-guide-financial-statements; OpenStax, Principles of Finance, 6.3 Liquidity Ratios (current ratio = current assets ÷ current liabilities; Clear Lake Sporting Goods, $200,000 ÷ $100,000 = 2). https://openstax.org/books/principles-finance/pages/6-3-liquidity-ratios.
2. ca = $85,000.00, cl = $120,000.00 gives wc = -$35,000.00, ratio = 0.708333. Source: U.S. Securities and Exchange Commission, Beginners' Guide to Financial Statements (working capital = current assets − current liabilities). https://www.sec.gov/about/reports-publications/beginners-guide-financial-statements.
3. ca = $15,250.50, cl = $0.00 gives wc = $15,250.50. Source: U.S. Securities and Exchange Commission, Beginners' Guide to Financial Statements (working capital = current assets − current liabilities). https://www.sec.gov/about/reports-publications/beginners-guide-financial-statements.

## FAQ

### What is working capital?

Working capital is the money a company would have left if it paid all of its current liabilities, the debts due within a year, out of its current assets. It shows whether the business can cover its short-term bills.

### How do I calculate working capital?

Subtract current liabilities from current assets. Clear Lake Sporting Goods had $200,000 of current assets and $100,000 of current liabilities, so its working capital was $100,000.

### What counts as current assets and current liabilities?

Current assets are things a company expects to turn into cash within a year: cash, short-term investments, accounts receivable and inventory. Current liabilities are debts due within a year: accounts payable, wages, taxes owed and the part of loans due this year.

### Can working capital be negative?

Yes. With $85,000 of current assets and $120,000 of current liabilities, working capital is −$35,000. More is due within the year than the current assets cover, so the company may need to borrow or collect cash faster.

### What is the difference between working capital and the current ratio?

Both use the same two numbers. Working capital subtracts them and gives a dollar amount. The current ratio divides them, which makes companies of different sizes easier to compare. Positive working capital always means a current ratio above 1.

### Why is there no current ratio when liabilities are $0?

The current ratio divides by current liabilities, and nothing can be divided by $0. The working capital still shows.

## Sources

- U.S. Securities and Exchange Commission, Beginners' Guide to Financial Statements: working capital = current assets − current liabilities, the money left over if a company paid its current liabilities from its current assets. https://www.sec.gov/about/reports-publications/beginners-guide-financial-statements (retrieved 2026-10-18)
- OpenStax, Principles of Finance, 6.3 Liquidity Ratios: current ratio = current assets ÷ current liabilities, the same amounts as working capital; Clear Lake Sporting Goods, $200,000 ÷ $100,000 = 2. https://openstax.org/books/principles-finance/pages/6-3-liquidity-ratios (retrieved 2026-10-18)