What is a healthy current ratio?

A ratio between 1.5x and 2.0x is ideal. A ratio below 1.0x means the firm may struggle to pay its bills over the next 12 months.

Can a company have too much working capital?

Yes. An excessively high ratio (e.g. 4.0x) indicates the company is holding idle cash and excess inventory rather than reinvesting capital into growth.

Working Capital & Liquidity Calculator

Calculate balance sheet liquidity. Enter current assets and current liabilities to find current ratios.

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