Current ratio and working capital calculator

How the calculation works

Current ratio = current assets ÷ current liabilities. Quick ratio = (current assets − inventory) ÷ current liabilities. Working capital = current assets − current liabilities. With zero current liabilities the ratios are undefined and are shown that way.

A worked example

Using the illustrative figures in BDC’s glossary, $120,000 of current assets against $70,000 of current liabilities gives working capital of $50,000 and a current ratio of about 1.71 to 1. If $40,000 of $120,000 were inventory and liabilities were $80,000, the current ratio would be 1.50 and the quick ratio 1.00.

Assumptions and limits

The ratios describe one balance sheet date and say nothing about when cash arrives or leaves. A high ratio built on slow receivables or unsold inventory can still mean tight cash, and a low ratio is normal in some industries. There is no single target that suits every business. The quick ratio here removes inventory only; BDC’s alternative formula also removes prepaid expenses. Use figures from the same balance sheet.

General educational information. Inputs stay on this device and are not submitted. Confirm the assumptions before using a result in a business decision.

Source and further reading

Formula references checked October 24, 2026: BDC glossary: current ratio; BDC glossary: working capital and quick ratio. The examples above use Sora’s own illustrative figures.

Working capital

Balance sheet

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