Enter the current assets and current liabilities into the calculator to determine the working capital ratio of a business.

## Working Capital Ratio Formula

The following formula is used to calculate a working capital ratio.

WCR = A / L

• Where WCR is the working capital ratio
• A is the total assets (\$)
• L is the total liabilities (\$)

## Working Capital Ratio Definition

A working capital ratio is a ratio of the value of all assets to all liabilities of a business. It’s one measure used to determine the profitability and position of a company.

## Working Capital Ratio Example

How to calculate a working capital ratio?

1. First, determine the total asset value.

Measure the value of all assets owned by the business.

2. Next, determine the total liabilities value.

Measure the total value of all liabilities owned by the business.

3. Finally, calculate the working capital ratio.

Calculate the working capital ratio using the equation above.

## FAQ

What is working capital ratio?

A working capital ratio is a measure of how much capital a company has to use with respect to liabilities. The greater the ratio, the greater the position of the company.