Enter your current assets and liabilities to see how healthy your working capital is.
What working capital tells you
Working capital is the money available to run your day-to-day operations, calculated as current assets minus current liabilities. Current assets are things you can turn into cash within a year — cash itself, money customers owe you, and stock. Current liabilities are what you owe within a year — supplier bills, short-term loans, tax due. Positive working capital means you can comfortably meet your near-term obligations; negative working capital is an early warning that a cash squeeze may be coming.
This calculator returns both the absolute figure and the current ratio, which is current assets divided by current liabilities. The ratio puts your position on a comparable scale: a ratio above 1 means assets exceed short-term debts, and many businesses aim for somewhere around 1.5 to 2. Too low and you may struggle to pay bills; surprisingly, too high can mean cash or stock sitting idle instead of being put to work.
Working capital is a snapshot, so track it over time rather than reading a single figure. A steadily falling ratio can reveal a problem — perhaps slow-paying customers or rising stock — long before it shows up in profit. The levers to improve it are practical: collect receivables faster, manage stock so it does not tie up cash, and negotiate sensible payment terms with suppliers.
Because it is built from your assets and liabilities, this ratio is only as accurate as your bookkeeping. Tallium keeps your receivables, payables, stock and cash current in one place, so your working capital and current ratio are always available at a glance rather than reconstructed at month-end.
Frequently asked questions
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