Business
Working Capital & Liquidity
Whether your business can cover the next twelve months of bills out of current assets.
Your numbers
Working capital
$91,000
- Current ratio
- 2.14x
- Quick ratio
- 1.41x
- Cash runway
- 1.4 months
- Current assets
- $171,000
- Current liabilities
- $80,000
Half of Sidney runs on seasonal cash flow, so we look at this alongside your slowest month, not just the year-end balance sheet.
Working Capital & Liquidity explained simply
Working capital is what a business has on hand right now minus what it owes right now. Positive means you can pay this year's bills. Negative means trouble is coming.
For example
$171,000 in cash, receivables and inventory against $80,000 of bills leaves $91,000 of working capital and a healthy 2.1x current ratio.
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Want a second set of eyes on these numbers?
These calculators are estimates for planning purposes and don't account for every detail of your situation. Bring your results to us and we'll pressure-test them against your actual tax picture.
Talk to a CPA