Rytvae Consulting · Think Right · Invest Right
Net Working Capital Calculator
Result
Chart
Show formula & working
Net working capital = Current assets − Current liabilities
Working capital gap = Current assets − (Current liabilities − Bank borrowings for working capital)
Details
How this works
Net working capital is the part of current assets funded by long-term money — the owners' and long-term lenders' cushion.
The working capital gap is what remains to be funded once trade creditors and other current liabilities are counted; banks finance part of it.
Frequently asked questions
Is negative NWC always bad?
Not always — some businesses collect cash before paying suppliers — but lenders read it as a sign that long-term assets are funded short-term.
How does NWC relate to MPBF?
Under Tandon Method II, the business must fund at least 25% of current assets from long-term sources — that is its required NWC.
Getting accounts ready for a lender?
How figures are classified changes the ratios lenders read. Talk to Rytvae before you submit.