What is Working Capital?
Working capital = current assets − current liabilities. Positive means the business can cover short-term obligations.
A real Kenyan example
Current assets 1.2m − current liabilities 700k = KES 500k working capital. Current ratio = 1.71.
Formula
Working capital = Current assets − Current liabilities · Current ratio = CA ÷ CL
Why it matters
Negative working capital is a red flag to lenders, suppliers and investors.
How Veira helps
Veira tracks current assets and liabilities weekly so working capital is always current.
FAQs
Healthy current ratio?
1.5 to 3.
Above 3?
Trapped cash, could earn more elsewhere.
Below 1?
Unable to cover short-term obligations, urgent.
Includes long-term debt?
Only the current-year portion.
Does Veira track?
Yes weekly.