Working Capital Calculator
Overcome your Working Capital Challenges with Invoice Discounting
The working capital calculator is an easy-to-use online tool
that allows businesses to determine how much surplus cash they
need to keep running. Working capital refers to the assets owned
by a company against its liabilities and is a measure of its
of one’s company is crucial for making business decisions.
Hence, individuals may want to keep track of their business’s
cash flow using this free tool.
How Invoice Discounting works?
A Brief Explanation Of Working Capital
Working capital is the money required by a business to run its
daily operations, including paying bills, debts, employees’
wages and purchasing raw materials. This financial liquidity
indicator is defined as the difference between a company’s
current assets and current liabilities.
Working Capital = Current Assets - Current Liabilities
Current assets refer to whatever the company possesses in cash
or things it can convert to cash in less than a year. On the
other hand, current liabilities refer to a business's total
debt, whether interest-bearing (loans) or non-interest bearing
A positive working capital shows that a company is
well-positioned to cover its liabilities and conduct business
expansions. However, a negative working capital indicates that
the company needs financial assistance very soon. KredX offers
to solve working capital problems as businesses can use unpaid
invoices that would otherwise be unavailable for their needs.
Working Capital Loan Vs Invoice Discounting:
Traditional financial institutions provide a working capital
loan to cover the cost of running a company. One can avail such
financing by furnishing details about the purpose of the loan,
the company’s balance sheets etc.
On the other hand, invoice discounting is an alternative
financing method where businesses can offer their outstanding
accounts receivable to get working capital. The following table
illustrates some of the differences between the two financing
Working Capital Loans
These funds come with stringent eligibility criteria.
This is a flexible funding option with a hassle-free
May or may not require collateral
The unpaid invoices are used as collateral
Long repayment tenure, usually 12, 18 or 24 months
Has shorter repayment tenure between 30-90 days
These loans appear on the balance sheet as debt.
No liabilities are added to the balance sheet.
Repayments made in Equated Monthly Instalments (EMIs)
Have to repay in a lump sum
How Is Working Capital Calculated?
To calculate the working capital needs, one needs to use the
Net working Capital = Current Assets – Current Liabilities
Here the working capital calculation considers all sorts of
current assets, including savings accounts, stocks, bonds,
mutual funds, cash equivalents, inventory items and other
short-term prepaid expenses. Current liabilities include rent,
accounts payable, cost of utilities, materials and supplies and
This value shows how much working capital a business possesses.
To know how much funds a company needs to meet short-term debt
obligations, one needs to determine the current or working
The following formula is used for the calculation of the current
Current ratio = Current assets/current liabilities
A ratio around two is considered adequate for optimum
performance, although this can vary for different businesses
(1). Generally, a working capital ratio below this indicates an
inability to pay financial obligations without a degree of
safety, while a number well above this indicates poor use of
How To Use KredX Working Capital Calculator?
The online KredX working capital calculator helps businesses
determine the amount of working capital they need to smooth out
their financial situation. Here is how one can use this
calculator to figure out the number:
Yes, the KredX working capital calculator is 100%
free to use with no limitations, signing up
requirements or hidden charges.
No, anyone can use this free tool on our site
without requiring them to log in or pay any fee.
The working capital ratio provides a rough idea
about how much capital your business requires to
keep running. Your business may need more cash
depending on its business volume, nature of sales
(seasonal or year-round), accounts receivables,
inventory turnover rates etc.
You can use your company’s unpaid invoices as
security to get invoice discounting from KredX. We
offer timely access to capital in just 24 to 72
hours* for up to 90%* of the invoice amount (2).