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Working Capital Limit Assessment Calculator

Work out working capital limit assessment instantly with clear inputs, formula shown and shareable results.

About Working Capital Limit Assessment Calculator

Working capital need is sized from sales and the operating cycle, reduced by supplier credit already funding it. The bank finances the gap less the promoter's margin, which is the borrower's own stake in the current assets.

Formula

Limit assessment

Gross WC = sales × cycle days / 365; limit = (gross WC - creditors) × (1 - margin)

Worked example

With the default values below, Working Capital Limit Assessment Calculator returns Assessed Working Capital Limit of $47,054,794.52. Change any input above and every figure here is recalculated in your browser.

Inputs used

Projected Annual Salesminimum 0
500,000,000
Operating Cycle In Daysaccepts 1–365
75
Promoter Marginaccepts 0–60 %
25 %
Trade Creditorsminimum 0
40,000,000

Results

Assessed Working Capital Limit
$47,054,794.52
Gross Working Capital Requirement
$102,739,726.03
Working Capital Gap After Creditors
$62,739,726.03
Margin The Business Must Fund
$15,684,931.51

Step by step

  1. 1Values used
  2. 2Limit assessment
  3. 3Assessed Working Capital Limit= 47,054,794.52
  4. 4Gross Working Capital Requirement= 102,739,726.03
  5. 5Working Capital Gap After Creditors= 62,739,726.03
  6. 6Margin The Business Must Fund= 15,684,931.51

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 or fees or charges 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 deduct creditors?

Because supplier credit already finances part of the current assets, so bank finance would be duplicating it.

How is the operating cycle shortened?

Faster inventory turns and quicker collections both cut the cycle and therefore the borrowing needed.

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