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Working Capital Formula. To calculate working capital, subtract a company's current liabilities from its current assets. Both figures can be found in public companies' publicly...
What is the Working Capital Formula? The working capital formula is: Working Capital = Current Assets – Current Liabilities. The working capital formula tells us the short-term liquid assets available after short-term liabilities have been paid off.
You can calculate working capital by taking the company’s total amount of current assets and subtracting its total amount of current liabilities from that figure.
Working capital is calculated by subtracting current liabilities from current assets, as listed on the company’s balance sheet. Current assets include cash, accounts receivable and inventory. Current liabilities include accounts payable, taxes, wages and interest owed.
It is calculated using a simple formula current assets (accounts receivables, cash, inventories of unfinished goods and raw materials) minus current liabilities (accounts payable, debt due in one year).
Working Capital Formula. The formula to calculate working capital—at its simplest—equals the difference between current assets and current liabilities. Working Capital = Current Assets – Current Liabilities. Where: Current Assets Current assets are converted into cash within a year (<12 months).
Working capital is the difference between current assets and liabilities. Use this calculator to determine your working capital.