Determine Your Working Capital Requirements Calculator
You want your business to be healthy and grow.
What is a sign of a healthy business? A working capital calculator can show you the amount of capital you have to invest back into your business and employees or, on the flip side, if you need to reduce your liabilities.
Your business can do more with enough working capital, also known as total assets minus current liabilities. You’ll then find your current ratio by dividing current assets by current liabilities. Your business should aim to have a current ratio between 1.2 and 2. To determine your working capital and current ratio, you’ll need your annual growth rate, total assets and total liabilities.
Frequently Asked Questions:
How do you calculate working capital?Working capital is calculated by subtracting current liabilities from current assets.
Why is working capital important?Working capital is a sign that your business is healthy. If your business doesn’t have enough readily available assets compared to debt, you may have trouble paying bills. If you, however, have too much working capital, you may not be investing your assets as efficiently as you could be.
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