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##### Net Working Capital Ratio Calculator - Glossary:

Using our net working capital ratio calculator, helps to compare, measure, understand the overall health of the business.##### Net Working Capital Ratio:

Shows the proportion of short term net funds to assets. In simple words, it is a measure to know, if a company is gradually shifting more of its assets into or out of long-term assets.##### How to calculate?

**Formula:**Net Working Capital Ratio = Net Working Capital/Total Assets

This is a Balance Sheet component, the values are commonly stated against Current Assets, Current Liabilities and Total Assets.

**Note:**

**Net Working Capital**= total current assets - total current liabilities.

It is a liquidity calculation that measures a company’s ability to pay off its current liabilities with current assets.