# Net Working Capital Ratio Calculator

Key in the Current Assets, Current Liabilities and Total Assets Values from your Balance Sheet to the respective fields given below and then click Calculate to get the desired result.

##### 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.

##### Current Assets:
This is a balance sheet component - cash, cash equivalents, account receivables, merchandise inventory and marketable securities can easily be converted into cash in the short term.

##### Current Liabilities:
This is a balance sheet component - accounts payable, tax payable (sales, payroll and other taxes) that are due in short-term.

##### Total Assets:
Total assets are the sum of all current and noncurrent assets that a company owns.
##### Example:
Net working capital ratio for a company with a total current assets of \$180,000 , current liabilities of \$85,000 and total assets of \$220,000 is 0.43 : 1. It means 43% of totals assets are in the form of short-term assets (Net working capital – liquid funds).