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Understanding the Working Capital Ratio. How to Calculate Working Capital Working capital is calculated by using the current ratio which is current assets divided by current liabilities. Net Working Capital Analysis.
Accounts receivable Days credit x Daily revenue Accounts receivable 45 x 182500 365 Accounts receivable 22500 Accounts receivable 22500 182500 123.
If youre calculating days working capital over a long period such as from one year to another you can calculate the. For example in the case of Johnson Johnson youd take 1 46 to arrive at 217. If youre calculating days working capital over a long period such as from one year to another you can calculate the. Inventory accounts receivable cash on hand and short-term accounts.