Determine Your Working Capital Requirements

Business Information

The annual growth rate of your business.

The target current ratio you are trying to reach. Current ratio compares a firm's current assets to its current liabilities. The current ratio for most businesses should be between 1.5 and 3.0.

Current assets

The value of your current assets. Currents asset are either cash or those assets which can converted to cash within a reasonable period. Typical current assets include cash, cash equivalents, short-term investments, accounts receivable, etc.

Current liabilities

The value of your current liabilities. Current liabilities typically include short term debt, accounts payable, and other types of debt that need to be paid within one year.

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Working Capital Requirements
Current Ratio	Current Working Capital	Required Working Capital

Working capital is the amount you have remaining when current liabilities are subtracted from current assets. Whether a business has enough working capital is measured by the 'current ratio', or current assets divided by current liabilities. Generally, a current ratio of between 1.2 and 2 is considered the sign of a healthy business. If your current ratio is below 1.2, its an indicator that your business might have difficulties paying its bills. If it is above 2, its an indicator that your assets are not being put to their best use.

This calculator is intended for informational purposes only and is considered an estimate. The accuracy of this calculator is not guaranteed by General Electric Credit Union (GECU). The calculator and its results do not constitute the advice of, or reflect actual products, services, rates, and/or terms available. Nothing contained in the calculator shall constitute an offer or solicitation of a product or service by GECU. This calculator is not intended to offer any tax, legal, financial, or investment advice. Please consult with qualified advisors to discuss your specific needs.

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