Operating Working Capital Calculator

✖Operating Current Assets refer to the short-term assets that a company requires to support its day-to-day operations.ⓘ Operating Current Assets [OCA]			+10% -10%
✖Operating Current Liabilities are the short-term obligations that a company incurs as part of its day-to-day operations.ⓘ Operating Current Liabilities [OCL]			+10% -10%

✖Operating Working Capital measures the funds that are tied up in the day-to-day operations of a business.ⓘ Operating Working Capital [OWC]

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Formula

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Operating Working Capital

Formula

`"OWC" = "OCA"-"OCL"`

Example

`"710000"="1050000"-"340000"`

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Operating Working Capital Solution

STEP 0: Pre-Calculation Summary

Formula Used

Operating Working Capital = Operating Current Assets-Operating Current Liabilities
OWC = OCA-OCL
This formula uses 3 Variables

Variables Used

Operating Working Capital - Operating Working Capital measures the funds that are tied up in the day-to-day operations of a business.
Operating Current Assets - Operating Current Assets refer to the short-term assets that a company requires to support its day-to-day operations.
Operating Current Liabilities - Operating Current Liabilities are the short-term obligations that a company incurs as part of its day-to-day operations.

STEP 1: Convert Input(s) to Base Unit

Operating Current Assets: 1050000 --> No Conversion Required
Operating Current Liabilities: 340000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

OWC = OCA-OCL --> 1050000-340000

Evaluating ... ...

OWC = 710000

STEP 3: Convert Result to Output's Unit

710000 --> No Conversion Required

FINAL ANSWER

710000 <-- Operating Working Capital

(Calculation completed in 00.004 seconds)

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Credits

Created by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

Vishnu K has created this Calculator and 200+ more calculators!

Verified by Keerthika Bathula

Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

Keerthika Bathula has verified this Calculator and 25+ more calculators!

< 17 Asset Management Calculators

Seller's Discretionary Earnings

Go Seller Discretionary Earnings = Pre-Tax Income+Owner's Salary+Net Interest Expenses+Depreciation and Amortization+Discretionary Expenses+Non Recurring Expenses

Amortization of Intangible Assets

Go Amortization Expense = (Historical Cost of Intangible Asset-Residual Value)/Useful Life Assumption

Cash Available for Distribution

Go Cash Available for Distribution = Funds from Operations+Non-Recurring Items-Capital Expenditures

Residual Income

Go Residual Income = Operating Income-Minimum Required Rate of Return*Average Operating Assets

Net Capital Spending

Go Net Capital Spending = Ending Net Fixed Assets-Beginning Net Fixed Assets+Depreciation

Capital Structure

Go Capital Structure = Common Equity Weight+Debt Weight+Preferred Stock Weight

Allowance Method of Doubtful Accounts

Go Net Accounts Receivables = Gross Accounts Receivables-Allowance for Doubtful Accounts

Operating Working Capital

Go Operating Working Capital = Operating Current Assets-Operating Current Liabilities

Inventory Write-Down

Go Inventory Write Down = Historical Cost-Lower of Cost or Net Realizable Value

Net Realizable Value

Go Lower of Cost or Net Realizable Value = Expected Sale Price-Disposal Costs

Net Identifiable Assets

Go Net Identifiable Assets = Identifiable Assets-Total Liabilities

Expense Ratio

Go Expense Ratio = Annual Operating Expenses/Average Fund Assets

Inventory Days

Go Inventory Days = (Average Inventory/Cost Of Goods Sold)*365

Basic Earnings Power Ratio

Go Basic Earnings Power Ratio = Operating Income/Total Assets

Internal Growth Rate

Go Internal Growth Rate = Retention Ratio*Return on Assets

Depreciable Cost of Asset

Go Depreciable Cost = Purchase Cost-Salvage Value

Conversion Price

Go Conversion Price = Par Value/Conversion Ratio

Operating Working Capital Formula

Operating Working Capital = Operating Current Assets-Operating Current Liabilities
OWC = OCA-OCL

What is Operating Working Capital?

Operating Working Capital (OWC) is a financial metric that represents the difference between a company's current assets and current liabilities, excluding cash and debt. It provides insights into a company's short-term financial health and its ability to cover its short-term obligations with its short-term assets generated from its core operating activities.
Operating Working Capital essentially measures the funds that are tied up in the day-to-day operations of a business. A positive OWC indicates that a company has sufficient short-term assets to cover its short-term liabilities, which is generally a sign of good liquidity and financial health. Conversely, a negative OWC suggests potential liquidity issues, meaning the company may struggle to meet its short-term obligations using its short-term assets.
Managing Operating Working Capital effectively is crucial for businesses to ensure smooth operations, meet short-term financial obligations, and support growth opportunities.

How to Calculate Operating Working Capital?

Operating Working Capital calculator uses Operating Working Capital = Operating Current Assets-Operating Current Liabilities to calculate the Operating Working Capital, The Operating Working Capital measures the current assets and current liabilities used as part of a company’s core, day-to-day operations. Operating Working Capital is denoted by OWC symbol.

How to calculate Operating Working Capital using this online calculator? To use this online calculator for Operating Working Capital, enter Operating Current Assets (OCA) & Operating Current Liabilities (OCL) and hit the calculate button. Here is how the Operating Working Capital calculation can be explained with given input values -> 710000 = 1050000-340000.

FAQ

What is Operating Working Capital?

The Operating Working Capital measures the current assets and current liabilities used as part of a company’s core, day-to-day operations and is represented as OWC = OCA-OCL or Operating Working Capital = Operating Current Assets-Operating Current Liabilities. Operating Current Assets refer to the short-term assets that a company requires to support its day-to-day operations & Operating Current Liabilities are the short-term obligations that a company incurs as part of its day-to-day operations.

How to calculate Operating Working Capital?

The Operating Working Capital measures the current assets and current liabilities used as part of a company’s core, day-to-day operations is calculated using Operating Working Capital = Operating Current Assets-Operating Current Liabilities. To calculate Operating Working Capital, you need Operating Current Assets (OCA) & Operating Current Liabilities (OCL). With our tool, you need to enter the respective value for Operating Current Assets & Operating Current Liabilities and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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