Current Ratio Calculator

You cannot directly calculate the current ratio from working capital alone. However, you can use working capital as one of the components in the current ratio formula.

The formula to calculate the current ratio is:

Current Ratio = Current Assets / Current Liabilities

where Current Assets are the assets that can be easily converted into cash within one year, and Current Liabilities are the debts that are due within one year.

For example, if a company has a working capital of $100,000 and current liabilities of $80,000, the current assets would be:

Current Assets = Working Capital + Current Liabilities = $100,000 + $80,000 = $180,000

The current ratio would then be:

Current Ratio = Current Assets / Current Liabilities = $180,000 / $80,000 = 2.25

A working capital ratio of 1.5:1 means that the company has $1.50 in current assets for every $1 of current liabilities. This is generally considered a good working capital ratio as it indicates that the company has enough short-term assets to cover its short-term debts.