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Working Capital Calculator

Working capital = current assets − current liabilities. The current ratio = current assets ÷ current liabilities. Healthy SMEs run a ratio between 1.5 and 3.

Calculator
Result
Working capital KES 500,000.00 · Ratio 1.71
Current assetsKES 1,200,000.00
Current liabilitiesKES 700,000.00
Working capitalKES 500,000.00
Current ratio1.71

Above 1.5 is healthy for an SME. Above 3 may signal trapped cash.

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What working capital actually tells you

Working capital answers a single question: can the business pay what it owes in the next 12 months from what it can convert to cash in the same window?

Negative working capital is a red flag for banks and investors. Persistent positive working capital means a healthy SME.

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Worked examples

Assets 1.2m, Liab 700k
  • WC = KES 500,000 · Ratio = 1.71 → healthy

Frequently asked questions

What goes into current assets?
Cash, bank, M-Pesa float, inventory, accounts receivable expected within 12 months.
What goes into current liabilities?
Trade payables, short-term loans, VAT due, PAYE due, accrued expenses.
Is high working capital always good?
No. Above ratio of 3, you may have idle cash that should earn returns elsewhere.
How often should I check it?
Monthly is enough for most SMEs. Veira computes it weekly.
Does this include long-term debt?
Only the portion due within 12 months. Longer maturities are non-current.

Doing this by hand every time? Veira runs the same calculation automatically on every sale, no spreadsheet required.

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