✅ Free Tool — No Login Required
Working Capital Calculator India — Current Ratio, Quick Ratio & Cash Conversion Cycle
Calculate net working capital, liquidity ratios, cash conversion cycle, and working capital gap for your business or loan application.
Working Capital = Current Assets − Current Liabilities
Current Ratio = Current Assets ÷ Current Liabilities (ideal: ≥ 1.5) | Quick Ratio = (Current Assets − Inventory) ÷ Current Liabilities (ideal: ≥ 1.0)
CCC = Inventory Days + Receivable Days − Payable Days (lower = better)
Current Ratio = Current Assets ÷ Current Liabilities (ideal: ≥ 1.5) | Quick Ratio = (Current Assets − Inventory) ÷ Current Liabilities (ideal: ≥ 1.0)
CCC = Inventory Days + Receivable Days − Payable Days (lower = better)
📋
Balance Sheet Data
💰 Current Assets
₹
₹
₹
₹
₹
Total Current Assets
₹0
📤 Current Liabilities
₹
₹
₹
₹
Total Current Liabilities
₹0
📊 Operating Data (for CCC)
₹
₹
%
Net Working Capital
₹—
Enter balance sheet data to calculate
Current Ratio
—
Ideal: ≥ 1.5
Quick Ratio (Acid Test)
—
Ideal: ≥ 1.0
📊 Current Assets vs Liabilities Breakdown
📊 Working Capital Ratio Benchmarks — India
How to interpret your current ratio and quick ratio across different business types:
| Ratio | Healthy | Acceptable | Warning Sign | Ideal for Banks (Loan) |
|---|---|---|---|---|
| Current Ratio | ≥ 2.0 | 1.25 – 2.0 | < 1.0 | ≥ 1.33 (RBI norm for CC limits) |
| Quick Ratio | ≥ 1.5 | 1.0 – 1.5 | < 0.75 | ≥ 1.0 |
| Inventory Days | < 30 days | 30–60 days | > 90 days | Industry-specific |
| Receivable Days | < 30 days | 30–60 days | > 90 days | < 90 days preferred |
| Cash Conversion Cycle | < 30 days | 30–60 days | > 90 days | Lower = better |
* RBI guidelines require minimum Current Ratio of 1.33 for sanction of working capital credit limits by banks.
📖 How to Use This Calculator
- 1Enter Current AssetsFrom your balance sheet: cash, bank balance, debtors (money owed to you), inventory, short-term investments, and other current assets like prepaid expenses and advance tax.
- 2Enter Current LiabilitiesFrom your balance sheet: creditors (money you owe suppliers), short-term loans and OD, outstanding salary/expenses, and advance payments received from customers.
- 3Add Operating Data for CCCEnter annual revenue and COGS to calculate Inventory Days, Receivable Days, Payable Days, and the full Cash Conversion Cycle.
- 4Set Required WC %Most businesses need 20–30% of annual revenue as working capital. Set this to see your working capital gap — how much additional funding you might need.
✅ Why Use This Calculator
⚖️
Both Key Ratios
Current ratio and Quick ratio with colour-coded health indicators and benchmarks.
🔄
Cash Conversion Cycle
Breaks down CCC into inventory days, receivable days, and payable days.
💧
WC Gap Analysis
Shows how much additional working capital funding your business needs.
🏦
Bank-Ready Output
Ratios match what banks check for CC/OD limits — RBI minimum is 1.33 CR.
📊
Visual Chart
Asset vs liability breakdown shows exactly where your working capital comes from.
🔒
100% Private
No data stored. Runs entirely in your browser.
❓ Working Capital — Frequently Asked Questions
What is working capital and how is it calculated?
Working Capital = Current Assets − Current Liabilities. Current Assets: cash, debtors, inventory, short-term investments. Current Liabilities: creditors, short-term loans, outstanding expenses, advance from customers. Positive working capital means you can pay short-term obligations. Negative working capital signals serious liquidity stress and is a red flag for banks and investors.
What current ratio do banks require for working capital loans?
RBI guidelines require a minimum Current Ratio of 1.33 for banks to sanction working capital credit limits (CC/OD). Most banks prefer 1.5 or above. A current ratio below 1.33 typically results in rejection of the CC/OD application. To improve current ratio before applying: clear short-term loans, convert current liabilities to long-term, collect debtors faster, or bring in equity capital.
What is the cash conversion cycle and why does it matter?
CCC = Inventory Days + Receivable Days − Payable Days. It measures how long cash is tied up in operations. A 60-day CCC means your cash is locked for 60 days before it comes back. Lower CCC = better liquidity. Negative CCC (like large retailers) means you collect from customers before paying suppliers — an excellent cash flow position. To improve CCC: reduce inventory days (faster stock turnover), reduce receivable days (collect faster), increase payable days (negotiate longer credit from suppliers).
How to improve working capital for my business?
Ways to improve working capital: (1) Collect receivables faster — offer early payment discounts, send invoices immediately, follow up at 30 days. (2) Reduce inventory — use just-in-time ordering, identify slow-moving stock. (3) Negotiate longer credit terms with suppliers — extend from 30 to 60 days. (4) Convert short-term debt to long-term — term loans instead of OD. (5) Invoice discounting / factoring — sell debtors to NBFC for immediate cash. (6) Apply for MSME working capital loan — Mudra Kishore/Tarun or CC limit against inventory and debtors.
What is the working capital gap and how to fund it?
Working Capital Gap = Required Working Capital − Available Working Capital. Example: ₹1 crore revenue needs ₹25 lakh WC. Available NWC is ₹15 lakh. Gap = ₹10 lakh. Funding options: Working capital loan (CC/OD limit), MSME loan from bank, invoice discounting against debtors, supply chain financing, or equity infusion from promoters. Banks typically fund 75–80% of the WC gap (margin money of 20–25% is contributed by the business owner).
💼 Need a CA or Working Capital Loan Consultant?
Find verified Chartered Accountants and bank loan consultants for working capital assessment, CC/OD limits, and MSME loans in your city.