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Drawing Power Calculator

Work out drawing power instantly with clear inputs, formula shown and shareable results.

About Drawing Power Calculator

Drawing power is the amount actually available to draw, derived monthly from current assets rather than the sanctioned limit. Stock is taken net of creditors so that supplier-funded inventory is not financed twice.

Formula

Drawing power

DP = [(stock - creditors) + book debts] × (1 - margin)

Worked example

With the default values below, Drawing Power Calculator returns Drawing Power of $82,500,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Value Of Stockminimum 0
80,000,000
Book Debtsminimum 0
60,000,000
Trade Creditorsminimum 0
30,000,000
Margin Appliedaccepts 0–60 %
25 %

Results

Drawing Power
$82,500,000.00
Eligible Current Assets
$110,000,000.00
Stock Net Of Creditors
$50,000,000.00
Margin Retained
$27,500,000.00

Step by step

  1. 1Values used
  2. 2Drawing power
  3. 3Drawing Power= 82,500,000.00
  4. 4Eligible Current Assets= 110,000,000.00
  5. 5Stock Net Of Creditors= 50,000,000.00
  6. 6Margin Retained= 27,500,000.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

Frequently Asked Questions

Why can drawing power be below the sanctioned limit?

Because it moves with actual stock and receivables. A quiet month reduces drawing power even though the limit is unchanged.

Which debts are excluded?

Debts beyond the accepted ageing, usually ninety days, and any due from group companies.

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