Working Capital = Current Assets – Current Liabilities
Identify total current assets
Identify total current liabilities
Subtract current liabilities from current assets
Use the formula: Working Capital = Current Assets – Current Liabilities
Include cash, accounts receivable, inventory, and other short-term assets in current assets
Include accounts payable, short-term debt, accrued expenses, and other short-term obligations in current liabilities
If current assets are greater than current liabilities, working capital is positive
If current assets are less than current liabilities, working capital is negative
If current assets equal current liabilities, working capital is zero