Working capital calculator
- Formula
- Current assets − Current liabilities
Working capital = Current assets − Current liabilitiesWorking capital
$1,100,000
How it’s worked out
- 1Current assets − current liabilities$2,400,000 − $1,300,000$1,100,000
Runs in your browser; nothing you type is sent anywhere. Amounts in US dollars.
Worked on a real month of books
Northwind Traders, Inc., September 2026 (accrual basis, USD), the month the free course is taught on. Every figure is read off the course's posted ledger, not typed.
- 1Current assets − current liabilities$48,500 − $9,450$39,050
See the statements these come from in the course.
How to read it
Working capital is the cushion between what the company will collect or use within a year and what it must pay within a year.
Its change from one period to the next is the working-capital line in the cash flow statement — the reason profit and cash differ.
Common mistakes
- Including cash raised for a specific long-term purpose as if it were free to fund operations.
- Reading a change in working capital as a change in profit.
Questions
- How is working capital calculated?
- Current assets less current liabilities. It is a dollar amount, where the current ratio is the same comparison as a ratio.
- Is negative working capital bad?
- Not always. Businesses that collect before they pay — subscriptions billed up front, marketplaces — often run negative working capital by design.
Read it with
The metrics read alongside this one, and the terms it is confused with.
- Current ratio calculatorCurrent ratio is a liquidity and working-capital metric, calculated as Current assets ÷ Current liabilities.Calculator
- Cash conversion cycle calculatorCCC is a liquidity and working-capital metric, calculated as DSO + DIO − DPO.Calculator
- Free cash flow calculatorFree cash flow is a cash and runway metric, calculated as Operating cash flow − Capital expenditures.Calculator
- Working capitalWorking capital is a liquidity and working-capital metric, calculated as Current assets − Current liabilities.Term
The formula is the one the glossary states, and the arithmetic is unit-tested. A ratio with nothing to divide by shows a dash — undefined is not zero. General information, not financial advice.