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Working Capital Calculator: NWC, Operating NWC and Cash Release
Working capital is the money your business has tied up in day-to-day operations: customers who owe you, inventory on the shelf, less what you owe suppliers and others in the short term. Net working capital (NWC) is the standard measure, and operating NWC strips out cash and debt to show what operations alone consume.
Enter your current assets and liabilities to get both measures in dollars and as a percent of revenue, then size how much cash you could release by collecting faster, carrying less inventory or paying suppliers later. The example values are illustrative; replace them with yours.
Current assets
Current liabilities
Period
Cash release scenario
Your results
Net working capital (NWC)
$8,600,000
17.9% of revenue. Current assets minus current liabilities.
Operating net working capital
$7,800,000
16.3% of revenue. Excludes cash and short-term debt, so it shows what operations tie up.
Cash released by lever
Total cash released
$1,854,247
Operating NWC would move from $7,800,000 to $5,945,753 (12.4% of revenue).
Free template · Excel workbook
Working Capital Diagnostic Workbook
DSO, DIO, DPO and cash conversion cycle from your balances, with the cash value of a day and a lever-by-lever release plan.
Illustrative example values are prefilled; replace them with your own. Everything is calculated in your browser, and Performis does not store what you enter. Our analytics record which calculator was used and a few summary figures, such as a rounded result.
The formulas
- Net working capital (NWC)
- NWC = current assets − current liabilities = (cash + AR + inventory + other current assets) − (AP + accrued liabilities + short-term debt)
- Operating NWC
- Operating NWC = (AR + inventory + other operating current assets) − (AP + accrued operating liabilities)
- Percent of revenue
- NWC ÷ annual revenue × 100
- Cash released by a lever
- Days changed × (annual revenue ÷ days) for collections; days changed × (annual COGS ÷ days) for inventory and payables
How to interpret your result
Start with operating NWC
It is the cleaner view of how much cash the business model consumes. Cash and short-term debt are financing decisions that can hide the operating picture.
Use percent of revenue to track change
If operating NWC grows faster than revenue, the business is absorbing more cash per dollar of sales. Compare your own periods rather than someone else’s ratio.
A high NWC is not automatically good
Positive NWC gives a liquidity cushion, but a large balance can also mean slow collections or excess stock. Read it next to the days measures behind it.
Treat the scenario as a sizing estimate
The release assumes revenue and COGS stay constant and the day changes are achievable. Use it to rank levers, then confirm what is realistic with the underlying invoices, stock and supplier terms.
Mind classification
What you count as current, operating or accrued affects both measures. Apply the same definitions every period so trends are comparable.
Frequently asked questions
How do you calculate working capital?
Net working capital is current assets minus current liabilities. Operating net working capital leaves out cash and short-term debt: (AR + inventory + other operating current assets) − (AP + accrued operating liabilities).
What is the difference between NWC and operating NWC?
NWC includes cash and short-term debt, so it mixes financing choices with operations. Operating NWC isolates the cash that day-to-day operations tie up in receivables, inventory and payables.
Why show working capital as a percent of revenue?
It scales the balance to the size of the business, so you can compare periods, or your own divisions, even as revenue changes. Use annual revenue for a consistent basis.
How is the cash release estimated?
Each lever moves a number of days. Collections days are valued at revenue per day; inventory and payables days at cost of goods sold per day. The total is a one-time estimate at constant revenue and COGS.
Is my data stored or sent anywhere?
No. All calculations run in your browser and nothing you enter is collected or saved.
Take it further with a template
Free template · Excel workbook
Working Capital Diagnostic Workbook
DSO, DIO, DPO and cash conversion cycle from your balances, with the cash value of a day and a lever-by-lever release plan.
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