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Working capital calculator — NWC, ratio and days.

Enter current assets, current liabilities, revenue and receivables. Get net working capital, the working capital ratio, working capital turnover, receivables turnover and days sales outstanding, with a PDF for the file.

Your figures (₹)
Current assets
Inventories, trade receivables, cash and bank, short-term loans and advances.
Current liabilities
Trade payables, short-term borrowings, current maturities, other current liabilities.
Revenue for the period (credit sales)
Use credit sales if you can separate them; otherwise revenue from operations.
Trade receivables at the start
Trade receivables at the end
Days in the period
365 for a year, 90 for a quarter, 30 for a month.
Net working capital
₹18,00,000
Working capital ratio 1.56
Working
Net working capital (current assets − current liabilities)₹18,00,000
Working capital ratio (current assets ÷ current liabilities)1.56
Working capital turnover (revenue ÷ net working capital)13.33 ×
Average receivables₹25,00,000
Receivables turnover (revenue ÷ average receivables)9.60 ×
Days sales outstanding (days ÷ receivables turnover)38 days
Working capital days (NWC ÷ revenue × days)27 days
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How the working capital calculator works

Net working capital is current assets minus current liabilities. It measures the cushion a business has to fund day-to-day operations. A positive figure means short-term assets exceed short-term obligations. A negative figure means the business relies on suppliers or short-term borrowing to carry its operations.

The working capital ratio, also called the current ratio, divides current assets by current liabilities. A ratio above one means current assets cover current liabilities. What is healthy depends on the industry: a retailer collecting cash can run with a thin ratio, while a contractor waiting on milestone payments needs more.

Receivables turnover divides revenue by average receivables, and days sales outstanding divides the days in the period by that turnover. Together they show how quickly customers pay. Working capital days divide net working capital by revenue and multiply by the days in the period, showing how many days of revenue are tied up in working capital.

Worked example: a trading business for one year

A trading company has current assets of ₹50,00,000 and current liabilities of ₹32,00,000. Revenue for the year is ₹2,40,00,000. Receivables were ₹22,00,000 at the start and ₹28,00,000 at the end.

Inputs
Current assets₹50,00,000
Current liabilities₹32,00,000
Revenue₹2,40,00,000
Average receivables₹25,00,000
Output
Net working capital₹18,00,000
Working capital ratio1.56
Receivables turnover9.60 times
Days sales outstanding38 days
Net working capital is ₹50,00,000 minus ₹32,00,000, which is ₹18,00,000. The ratio is 50 ÷ 32, or 1.56. Average receivables are ₹25,00,000, so turnover is ₹2,40,00,000 ÷ ₹25,00,000, or 9.6 times, and 365 ÷ 9.6 gives about 38 days.

Common mistakes

Using year-end receivables only
A year-end balance can be unusually high or low. Using the average of the opening and closing balances gives a fairer turnover figure, and an even better one comes from monthly balances.
Using total revenue when sales are partly cash
Receivables relate to credit sales. If a large share of revenue is cash, using total revenue understates how long customers take to pay. Use credit sales where the books allow it.
Reading a high ratio as always good
A very high working capital ratio can mean idle cash, slow-moving stock or uncollected receivables. Look at what sits inside current assets, not just the total.
Mixing classification with Schedule III
Current and non-current classification follows Schedule III of the Companies Act, 2013 for companies. A loan due within twelve months is current, whatever the original term.
Ignoring seasonality
A year-end snapshot can hide peaks in working capital need during the year. For bank limits and cash planning, look at the monthly picture as well.

Frequently asked questions

What is the working capital formula?+
Working capital is current assets minus current liabilities. Current assets are items expected to turn into cash within twelve months, such as inventory, receivables and cash. Current liabilities are obligations due within twelve months, such as trade payables and short-term borrowings.
What is a good working capital ratio?+
There is no single answer. A ratio between about 1.2 and 2 is commonly regarded as comfortable for many businesses, but it depends on the industry and the quality of current assets. Banks assess it alongside other measures when setting limits.
How do I calculate receivables turnover?+
Divide revenue (preferably credit sales) by average trade receivables, where average receivables are the opening balance plus the closing balance, divided by two. Days sales outstanding is then 365 divided by the turnover.
What is the difference between net working capital and the working capital ratio?+
Net working capital is an amount in rupees, current assets less current liabilities. The working capital ratio divides the two, so it compares them as a multiple and is easier to compare across businesses of different sizes.
Can net working capital be negative?+
Yes. Businesses that collect cash quickly and pay suppliers on credit, such as some retailers, can run with negative working capital. For a business that sells on credit, a negative figure is a warning sign about short-term funding.

Authoritative sources

Schedule III, Companies Act, 2013 (current and non-current classification) — The formulas are standard financial analysis definitions. Current and non-current classification for companies follows Schedule III.
Always confirm against the latest version of the source. Regulations evolve and amendments are common.
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Last reviewed: 2026-10-09 · For informational purposes only — not professional advice.