Working Capital Needs Your working capital is used to pay short-
term obligations such as your accounts payable and buying
inventory. If your working capital dips too low, you risk
running out of cash. Even very profitable businesses can run
into trouble if they lose the ability to meet their short-term
obligations. The calculator assists you in determining working
capital needs for the next year. - Annual growth - The percent
of growth you expect over the next year. - Total current assets
- This is any cash or asset that can be quickly turned into
cash. This includes prepaid expenses, accounts receivable, most
securities and your inventory. - Total current liabilities -
This is a liability in the immediate future. This includes
wages, taxes and accounts payable. - Current ratio - Current
Assets divided by current liabilities. Your current ratio helps
you determine if you have enough working capital to meet your
short-term financial obligations. A general rule of thumb is to
have a current ratio of 2.0. Althou