Current Ratio Calculator

Current ratio, quick (acid-test) ratio and working capital from a balance sheet’s current assets, inventory and current liabilities.

$
Cash, short-term investments, receivables, inventory, prepaid expenses.
$
Excluded from the quick ratio.
$
Excluded from the quick ratio.
$
Current ratio
2.00 : 1
Quick (acid-test) ratio
1.60 : 1
Working capital
$100,000.00
Quick assets
$160,000.00

Estimate generated with SortedSums: https://sortedsums.com/current-ratio-calculator/. For informational purposes only; verify before relying on it.

Estimate only. This tool is for informational and educational purposes. Results depend on your inputs and simplifying assumptions, and are not a substitute for professional engineering, design or financial advice. Always verify with a qualified professional and applicable codes before purchasing, building or making decisions.

How it’s calculated

Liquidity ratios show whether a business can pay obligations due within a year from assets that will turn into cash within a year. The quick ratio is stricter: it leaves out inventory and prepaid expenses.

Current ratio = Current assets ÷ Current liabilities Quick ratio = (Current assets − Inventory − Prepaid expenses) ÷ Current liabilities Working capital = Current assets − Current liabilities

Example (OpenStax Principles of Finance, Clear Lake Sporting Goods): current assets 200,000, current liabilities 100,000, current ratio = 2.0. Cash 110,000 + short-term investments 20,000 + receivables 30,000 = 160,000 of quick assets, so the quick ratio is 1.6 and working capital is 100,000.

Frequently asked questions

What is a good current ratio?

Above 1 means current assets exceed current liabilities. Around 1.5–2 is often seen as comfortable, but norms vary widely by industry; a very high ratio can mean idle cash or slow-moving inventory.

What is the difference between the current ratio and the quick ratio?

The quick (acid-test) ratio excludes inventory and prepaid expenses, which can’t be quickly turned into cash, so it is a stricter test of liquidity.

Can working capital be negative?

Yes, when current liabilities exceed current assets. That can signal a cash squeeze, though some businesses (e.g. those paid upfront) run that way normally.

Embed this calculator

Add this free calculator to your own website. Copy the code below into your page’s HTML:

Sources

Formulas are taken from the free public references above. Results are provided “as is” for informational and educational purposes only. See our disclaimer.

Spotted a mistake or missing option? Report a problem · GitHub issue· Suggest a calculator

Related calculators

Accounts Receivable Turnover CalculatorAccounts receivable turnover ratio and days sales outstanding (DSO) from net credit sales and beginning and ending receivables.Inventory Turnover CalculatorInventory turnover ratio and days’ sales in inventory from cost of goods sold and beginning and ending inventory.Break-Even CalculatorFind how many units you must sell to cover fixed costs, the break-even sales revenue and your contribution margin ratio.CAGR Calculator (Compound Annual Growth Rate)Calculate the compound annual growth rate (CAGR) between a beginning and ending value over any number of years.Commission CalculatorWork out sales commission at a flat rate or with up to three tiers, plus total pay including an optional base salary.Contribution Margin CalculatorCalculate contribution margin per unit, contribution margin ratio and total contribution margin from price, variable cost and units.