Working Capital Calculator 2026

Short-term liquidity health from your balance sheet — current ratio, quick ratio, and cash conversion cycle.

Current assets

Cash & bank

₹

₹0₹20.00 Cr

Accounts receivable

₹

Money owed by customers — sundry debtors.

₹0₹20.00 Cr

Inventory

₹

Raw material, WIP, and finished goods at cost.

₹0₹20.00 Cr

Other current assets

₹

Prepaid expenses, short-term loans & advances, GST input credit.

₹0₹20.00 Cr

Current liabilities

Accounts payable

₹

Money you owe suppliers — sundry creditors.

₹0₹20.00 Cr

Short-term debt

₹

Working capital loans, CC limits used, current portion of long-term debt.

₹0₹20.00 Cr

Other current liabilities

₹

Accrued expenses, GST/TDS payable, advances from customers.

₹0₹20.00 Cr

Annual figures (for CCC)

Annual revenue

₹

Used to compute days sales outstanding (DSO).

₹0₹100.00 Cr

Annual COGS

₹

Used to compute days inventory outstanding (DIO) and days payables outstanding (DPO).

₹0₹100.00 Cr

Working capital: ₹40.00 L; Current assets ₹70.00 L − liabilities ₹30.00 L.

Healthy

Current ratio: 2.33
Quick ratio: 1.33
Cash ratio: 0.33

Cash Conversion Cycle

60.8 days

Days sales outstanding (DSO): 30.4 days
+ Days inventory outstanding (DIO): 60.8 days
− Days payables outstanding (DPO): 30.4 days

Working capital formula, with your numbers

Standard Formula

W = A − L R = A / L

Live Calculation (Plugging Your Values)

Total current assets (A):₹70,00,000

Total current liabilities (L):₹30,00,000

Working capital (W):₹40,00,000

Current ratio (R):2.33

Substituted Equation:

₹70,00,000 - ₹30,00,000 = ₹40,00,000 ₹70,00,000 / ₹30,00,000 = 2.33

Working capital:₹40,00,000

Current assets add up cash, receivables, inventory and other current assets; current liabilities add up payables, short-term debt and other current liabilities. The quick ratio leaves inventory out of current assets, because stock is the slowest to turn into cash, and the cash ratio counts cash alone. A current ratio of 1.5 or more is shown as healthy, 1.0 to 1.5 as tight, and below 1.0 as at risk.

About Working Capital Calculator

Working capital is the money a business has tied up in day-to-day trade: cash, money owed by customers and stock, less what it owes in the short term to suppliers and lenders. When it is positive, the short-term assets are larger than the short-term dues they have to cover.

This calculator adds up your current assets and current liabilities and reports working capital, the current, quick and cash ratios, and the cash conversion cycle in days once you enter annual revenue and COGS. It works on one balance-sheet date: it does not forecast how the figures will move, and it does not tell you what limit a bank will sanction. The Healthy, Tight and At risk label is this page's own guide, read off the current ratio, not a bank's or a regulator's test.

How it Works

The calculator takes three groups of inputs:

Current assets: cash & bank, accounts receivable, inventory and other current assets, as on your balance-sheet date. Together they make total current assets.
Current liabilities: accounts payable, short-term debt and other current liabilities, added up the same way.
Annual figures (for CCC): annual revenue and annual COGS. Receivables are measured against revenue, and inventory and payables against COGS, over a 365-day year, using the closing balances above rather than averages. The cycle appears only when both figures are above zero.

Why it helps

See cover at a glance: whether short-term assets cover short-term dues, as an amount and as three ratios.
Check cover without selling stock: the quick and cash ratios show what is left if inventory cannot be sold in time, or if only cash counts.
Find where cash is stuck: the days figures show whether money is waiting with customers, sitting in stock, or being carried by your suppliers.
Test a change first: see how paying a supplier or repaying short-term debt from cash moves the ratios before you do it.

References

How these numbers are checked →

Working Capital FAQs

What is the net working capital formula?

Net Working Capital = Current Assets − Current Liabilities. The Current Ratio = Current Assets / Current Liabilities expresses the same thing as a multiple, and is what lenders usually look at.

What is the working capital cycle?

Inventory Days + Receivable Days − Payable Days: the time between paying your supplier and collecting from your customer. Every day you shorten it releases cash permanently, which is why cutting receivable days is usually cheaper than taking a working capital loan.

How much working capital limit will a bank sanction?

Each bank sets the limit under its own board-approved loan policy. For micro and small enterprises, RBI guidance based on the Nayak Committee is that the working capital limit should be at least 20% of projected annual turnover, for limits up to Rs 5 crore. Under this turnover method the working capital need is taken as 25% of turnover: the bank finances at least 20% and you bring 5% as margin. On Rs 4 crore of projected turnover that is a limit of at least Rs 80 lakh, with Rs 20 lakh of your own money. For larger limits each bank chooses its own method of assessment, such as cash budgeting.

What is the 45-day MSME payment rule and how does it hit working capital?

Section 37(2)(g) of the Income-tax Act, 2025 (earlier section 43B(h)) disallows the expense in the year it is booked if a registered micro or small enterprise supplier is not paid within 45 days of acceptance (15 days without a written agreement). The deduction is deferred to the year of actual payment, so a Rs 50 lakh unpaid balance can add roughly Rs 15 lakh to your tax bill for that year. It forces buyers to release MSME dues on time, which tightens payable days and raises the working capital you must carry.

How do I convert receivable days into cash released?

Daily sales x days reduced. A business with Rs 12 crore of annual sales runs about Rs 3.29 lakh a day, so cutting receivable days from 75 to 60 frees 15 x 3.29 lakh = about Rs 49 lakh of cash — permanently, and with no interest cost. At a 10% cash credit rate that same Rs 49 lakh as a loan would cost Rs 4.9 lakh a year, which is why collections discipline beats a higher limit.

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