Calculate your business working capital and liquidity ratios — current ratio, quick ratio and cash ratio — to assess short-term financial health.
Enter balance sheet values and click
Analyse Working Capital
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| Tool | Pricing | Feature | Best For | |
|---|---|---|---|---|
BAJ Bajaj Finserv TOP96-hr disbursal | 13.50% onwards | Loan up to ₹50L · 96-hr disbursal | Established SMBs | Apply Now |
HDF HDFC BankInstant sanction letter | 15.00% onwards | Up to ₹40L · doorstep service | Salaried + business owners | Apply Now |
LDK Lendingkart1.3L+ businesses funded | 12-27% | Online · 3-day disbursal | Working capital top-ups | Apply Now |
IND IndifiSector-specific products | 15-24% | Industry-specific loans | Travel/restaurant SMBs | Apply Now |
FLX FlexiLoansNo foreclosure charges | 14-30% | Flexible repayment terms | Quick capital needs | Apply Now |
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Current Ratio
Current Assets ÷ Liabilities
Quick Ratio
(Assets − Inventory) ÷ Liabilities
Net Working Capital
Current Assets − Current Liabilities
A good ratio doesn't mean good cash flow. The cycle tells you how long money is tied up before it returns as cash.
Working Capital Cycle = Inventory Days + Receivables Days − Payables Days
Manufacturing Co.
Inventory: 60 days
Receivables: 45 days
Payables: 30 days
Cycle: 75 days
Cash locked 75 days per cycle
Retail / Supermarket
Inventory: 15 days
Receivables: 0 days (cash)
Payables: 45 days
Cycle: −30 days
Suppliers fund operations
Reduce your cycle by:
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Working capital = Current Assets - Current Liabilities. It represents the funds available for day-to-day business operations. Positive working capital means the business can meet its short-term obligations. Negative working capital is a warning sign of potential cash flow problems.
Current Ratio = Current Assets ÷ Current Liabilities. A ratio of 1.5–3.0 is generally considered healthy. Below 1.0 means liabilities exceed assets — liquidity risk. Above 3.0 may indicate idle cash not being put to productive use.
Quick Ratio = (Current Assets - Inventory) ÷ Current Liabilities. It excludes inventory (which may not be quickly convertible to cash). A quick ratio of 1.0+ is considered healthy. This is a stricter test of liquidity than the current ratio.
(1) Speed up receivables collection (reduce credit period), (2) Negotiate longer payable terms with suppliers, (3) Reduce inventory levels (JIT inventory management), (4) Secure a working capital loan or overdraft facility, (5) Convert slow-moving stock into cash.
Yes - retail businesses like Amazon operate with negative working capital (current liabilities > current assets). They collect cash from customers immediately but pay suppliers in 30-60 days, using supplier credit to fund operations. This is healthy negative working capital. It becomes dangerous when it stems from unpaid short-term debts the business cannot service.
Current Ratio = Current Assets divided by Current Liabilities (includes inventory). Quick Ratio = (Current Assets minus Inventory) divided by Current Liabilities (excludes inventory for a more conservative liquidity measure). For manufacturing businesses with large slow-moving inventory, quick ratio is more meaningful. Target: Current Ratio > 1.5, Quick Ratio > 1.0.
Working Capital Cycle = Inventory Days plus Receivables Days minus Payables Days. Example: 45 + 30 - 20 = 55-day cycle. This means cash is locked for 55 days per sales cycle. Shorter cycle means less working capital needed and less financing cost. To shorten: reduce inventory, collect receivables faster, negotiate longer credit terms with suppliers.
Working capital is a balance sheet snapshot: current assets minus current liabilities at a point in time. Cash flow is actual cash movement over a period. A business can have positive working capital but negative cash flow if it has large non-cash current assets like slow receivables or obsolete inventory. For day-to-day operations, cash flow is more critical.
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