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Working-Capital Calculator

Keep two different questions separate: the balance-sheet stock of current assets minus current liabilities, and the operating cash-flow amount needed to cover outflows, one-time needs, and available unrestricted operating cash.

Balance-sheet mode

Current assets minus current liabilities, with current ratio shown when liabilities are above zero.

Cash-cycle mode

Monthly cash outflows times coverage months plus one-time needs minus available unrestricted operating cash.

Boundary-first

No solvency prediction, lender approval, SBA eligibility, ROBS compliance answer, or universal target ratio.

Enter one working-capital case

Choose the balance-sheet mode for current assets minus current liabilities, or the operating cash-cycle mode for cash outflows, coverage months, one-time needs, and available unrestricted operating cash. Inputs stay in the page only. The tool uses native FormData and does not use query strings, cookies, local storage, or session storage.

Calculation mode

Balance-sheet mode reports net working capital and current ratio. Cash-cycle mode reports gap, surplus, or exact balance for the operating-cash formula.

Balance-sheet current assets and current liabilities

Use company balance-sheet amounts only. Receivables and inventory belong here as current assets. Payables belong here as current liabilities. Do not also count the same balances as cash-cycle timing adjustments.

Unrestricted company cash and cash equivalents available on the company balance sheet. Exclude retirement-plan assets, restricted cash, escrowed funds, and personal accounts. Units: whole dollars, rounded to the nearest $100. Allowed range: 0 to $50,000,000.

Customer amounts expected to be collected within the current operating cycle when included as current assets. Units: whole dollars, rounded to the nearest $100. Allowed range: 0 to $50,000,000.

Inventory counted as a current asset. Do not also enter it as a separate cash need unless the cash-cycle inputs already reflect purchasing timing. Units: whole dollars, rounded to the nearest $100. Allowed range: 0 to $50,000,000.

Other company current assets such as prepaid expenses or short-term deposits when properly classified as current assets. Units: whole dollars, rounded to the nearest $100. Allowed range: 0 to $50,000,000.

Vendor payables counted as current liabilities. Do not subtract them again in the cash-cycle mode. Units: whole dollars, rounded to the nearest $100. Allowed range: 0 to $50,000,000.

Accrued payroll, taxes, rent, utilities, or other operating expenses classified as current liabilities. Units: whole dollars, rounded to the nearest $100. Allowed range: 0 to $50,000,000.

Current portion of debt and current maturities, if included in current liabilities. Units: whole dollars, rounded to the nearest $100. Allowed range: 0 to $50,000,000.

Other company obligations classified as current liabilities. Units: whole dollars, rounded to the nearest $100. Allowed range: 0 to $50,000,000.

Operating cash-cycle funding need

Use cash-flow inputs for the operating runway question. If receivables, inventory, or payables affect timing, reflect them once in monthly cash outflows or one-time needs rather than entering the same dollars twice.

Average monthly cash operating outflows for payroll, rent, utilities, inventory purchases, marketing, insurance, debt service, and similar operating cash uses. Units: whole dollars, rounded to the nearest $100. Allowed range: 0 to $25,000,000.

Number of months of outflow coverage to model. This is a user-entered worksheet assumption, not a universal recommendation. Units: quarter-month increments. Allowed range: 0 to 36.

One-time operating needs not already in monthly outflows, such as launch inventory, deposits, payroll ramp, repair, seasonality, or timing cushions. Units: whole dollars, rounded to the nearest $100. Allowed range: 0 to $50,000,000.

Company cash actually available for operations. Exclude restricted cash, escrowed funds, retirement-plan assets, and owner personal cash unless contributed and available. Units: whole dollars, rounded to the nearest $100. Allowed range: 0 to $50,000,000.

Net working capital

$170,000

Current ratio

2.31x

Cash-cycle gap or surplus

$150,000

Worksheet result

Current assets

$300,000

Cash, receivables, inventory, and other current assets entered in balance-sheet mode.

Current liabilities

$130,000

Payables, accrued expenses, current debt, and other current liabilities entered in balance-sheet mode.

Operating funding need before cash

$275,000

Monthly outflows times coverage months plus one-time operating needs.

Available unrestricted operating cash

$125,000

Cash entered as available for operating use in the cash-cycle mode.

Formula

Net working capital = current assets minus current liabilities. Current ratio = current assets divided by current liabilities when current liabilities are above $0.

$300,000 − $130,000 = $170,000 net working capital; current ratio 300000 ÷ 130000 = 2.307692307692x.

Unrounded details: current assets 300000, current liabilities 130000, net working capital 170000, current ratio 2.307692307692, base operating need 240000, operating funding need 275000, available unrestricted operating cash 125000, operating gap 150000.

Assumptions and boundaries

  • Balance-sheet mode treats receivables and inventory as current assets and payables as current liabilities. It does not also treat those same balances as timing adjustments.
  • Operating cash-cycle mode uses cash operating outflows, coverage months, one-time operating needs, and available unrestricted operating cash. It does not add receivables, inventory, or payables unless you have already reflected their timing in the monthly cash outflow or one-time need inputs.
  • Retirement-plan assets, restricted cash, escrowed funds, and owner personal accounts stay outside company working capital unless actually contributed to the corporation and available for operating use.
  • A ROBS plan stock purchase is separate from a personal cash contribution: the plan buys employer stock and the corporation receives cash if the transaction is completed.
  • The worksheet does not determine solvency, liquidity sufficiency, financing approval, SBA eligibility, profitability, valuation, tax results, legal results, fiduciary outcomes, or a universal target ratio or number of months.

Two working-capital modes, not one blended number

Balance-sheet net working capital is a stock measurement at a point in time: company current assets minus company current liabilities. The current ratio is current assets divided by current liabilities when current liabilities are above zero.

Operating cash-cycle funding need is a flow worksheet: monthly cash operating outflows multiplied by the coverage months selected by the user, plus one-time operating needs, minus available unrestricted operating cash. That result is a funding gap, surplus, or exact balance under the inputs entered. SBA materials recognize working capital as a possible 7(a) use and describe repayment from business cash flow, but this tool does not underwrite a loan or set a target reserve.[1][2]

Receivables, inventory, and payables need one lane

Receivables and inventory can be current assets in the balance-sheet mode. Payables can be current liabilities in that same mode. If you also want to model collection timing, inventory purchases, or vendor payment timing, reflect those effects once inside the cash-cycle inputs. Do not count the same receivable, inventory purchase, or payable both as a balance-sheet row and as a separate cash-cycle adjustment.

For buyers, franchises, and ROBS-funded companies, a sources-and-uses worksheet can otherwise appear to create cash twice. A receivable is not the same thing as unrestricted cash on hand, and a payable delay is not the same thing as permanent financing.

ROBS plan assets and company working capital are separate

IRS describes a ROBS arrangement as a structure in which rollover assets move into a plan and the plan uses those assets to purchase stock of a new C corporation. The corporation may receive cash from the employer-stock purchase, and the plan owns employer stock. That corporate cash can become company working capital if it is actually contributed and available for operations. Retirement-plan assets not contributed to the company, restricted cash, escrowed funds, and owner personal accounts stay outside company working capital.[3][4]

The worksheet does not decide whether a ROBS arrangement is compliant, whether stock was valued correctly, whether fiduciary duties were met, or whether the business should use retirement assets. IRS materials identify ROBS valuation, filing, prohibited-transaction, promoter-fee, and business-failure concerns.[3][4]

Formula and interpretation

Balance-sheet formula: current assets = cash and equivalents + receivables + inventory + other current assets. Current liabilities = payables + accrued expenses + current debt + other current liabilities. Net working capital = current assets minus current liabilities. Current ratio = current assets divided by current liabilities when current liabilities are not zero.

Cash-cycle formula: operating cash-cycle funding need = monthly cash operating outflows × coverage months + one-time operating needs − available unrestricted operating cash. A positive result is a gap, a negative result is a surplus, and zero is an exact balance. None of those labels determines solvency, liquidity sufficiency, financing approval, SBA eligibility, profitability, valuation, tax, legal, or fiduciary outcomes.

Working-capital calculator FAQ

What is net working capital?

In this worksheet, balance-sheet net working capital means current assets minus current liabilities. The current ratio is current assets divided by current liabilities when current liabilities are above zero.

What is operating cash-cycle funding need?

It is monthly cash operating outflows times coverage months plus one-time operating needs minus available unrestricted operating cash. The result is a gap, surplus, or exact balance under the numbers entered.

Where do receivables, inventory, and payables go?

In balance-sheet mode, receivables and inventory are current assets and payables are current liabilities. In cash-cycle mode, do not add those balances again unless their timing is already reflected once in outflows or one-time needs.

Can I include retirement-plan assets or restricted cash?

No, not unless the cash is actually contributed to the corporation and available for company operations. A ROBS plan stock purchase is a separate employer-stock transaction, not owner personal cash.

Does the calculator say how much working capital is enough?

No. It does not determine solvency, liquidity sufficiency, lender approval, SBA eligibility, profitability, valuation, tax, legal, fiduciary outcomes, or a universal target ratio or number of months.

Sources and verification

  1. SBA 7(a) loans

    SBA states that 7(a) loans may be used for short- and long-term working capital, that eligibility includes operating for profit, creditworthiness, and reasonable ability to repay, and that most 7(a) term loans are repaid with monthly principal and interest from business cash flow. Checked Aug. 13, 2026; page modified July 27, 2026.

  2. SBA 7(a) Working Capital Pilot

    SBA describes the 7(a) WCP as a monitored line of credit for financing needs and notes examples involving accounts receivable, accounts payable, and inventory reports. Checked Aug. 13, 2026.

  3. IRS ROBS compliance project

    IRS describes a ROBS as an arrangement where a plan uses rollover assets to purchase stock of a new C corporation, and identifies valuation, filing, prohibited-transaction, promoter-fee, and business-failure concerns. Checked Aug. 13, 2026; page last reviewed Nov. 16, 2025.

  4. IRS ROBS guidelines memorandum

    The IRS memorandum describes the typical ROBS sequence and states ROBS arrangements are not noncompliant per se but should be reviewed case by case. Checked Aug. 13, 2026; memorandum dated Oct. 1, 2008.

  5. SEC Investor.gov current ratio glossary

    Investor.gov provides the official SEC Investor.gov source location for the current-ratio glossary. Checked Aug. 13, 2026; the reader returned the page shell without definition text, so this page uses the source only for glossary location.

  6. FASB Accounting Standards Codification

    FASB ASC is the official U.S. GAAP codification access point. Checked Aug. 13, 2026; direct reader access returned HTTP 403 for the attempted concept page, so this worksheet states only conventional current-asset and current-liability arithmetic and does not quote inaccessible codification text.

Use with adjacent funding tools

For acquisition cash needs, use the acquisition down-payment calculator. For a franchise startup sources-and-uses worksheet, use the franchise funding calculator.

Acquisition down paymentFranchise funding