Working Capital Financing Calculator

All successful business models have somewhat elaborate plans and budgets that take into consideration their operating liquidity, fixed assets, operating capital, and current liabilities. Operating capital is an important aspect of business management and often relies on determining an organization’s working capital or operating liquidity.

In order to determine your corporation’s net working capital, you must add up fixed assets and subtract any current liabilities. Assets include accounts receivable and current inventory, while liabilities are accounts payable and debts that must be paid within 12 months. As such, any increase in working capital financing means that the corporation has either increased their net assets or decreased their net liabilities. Management of short-term assets and liabilities is referred to as working capital management.

Most working capital management occurs on a short-term basis and involves decisions that occur with 12 months or so. This differs from long-term decisions such as Capital Investment Decisions. Short-term management regulates cash flow through conversion cycles of raw materials, return on capital (ROC), and the particular credit policy of the firm or business. It is important to keep in mind that return on capital (ROC) is different than return on equity (ROE). ROC is a percentage that reflects income divided by employment costs. ROC enhances the value of the business when it exceeds the overall cost of the capital investment decisions.

Managing working capital can be a complex process and involves keeping track of cash, inventory, debtors, and short-term financing. Each of these aspects is monitored within a short-term window in order to maximize return on capital.

This tool to calculate working capital financing is a revolutionary way for business owners and corporation presidents to access working capital. You can get 98-99 cents on the dollar by selling receivables to accredited buyers in an online auction, providing your business with capital in as little as 2 days. There are no constraints that hinder traditional financing. In order to use a working capital financing calculator, you need to know how big your current line of credit is. You also need to state how much additional financing your business needs and what your annual revenue is. By selecting your particular industry from the drop-down list, the calculator will customize results to suit your organization’s requirements.

If you are feeling overwhelmed by the breadth of knowledge it takes to make these numbers work, a qualified financial professional will be able to ensure your business gets the financing it needs for future growth and development. Take your company to the next level with short-term management of available capital and maximize profitability of return on capital. Additionally, a working capital financing calculator that allows your business access to all of its available capital can be enormously beneficial to both business owners and their financial health of the company. Online tools are available to calculate your capital access, and after you've done the calculations yourself, you can contact a professional for a personalized estimate.