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KPI · Finance
Working capital: formula and example.
Working capital is the difference between current assets and current liabilities. It is the amount needed to fund day-to-day operations: stock and receivables minus what you still owe suppliers and other short-term creditors. Positive working capital means short-term debts are covered by current assets.
Working capital formula
Current assets − current liabilities
Worked example
At the end of 2025 Acme Groothandel had €3,300,000 of current assets and €2,200,000 of current liabilities. Working capital is €3,300,000 − €2,200,000 = €1,100,000. With revenue of €12,000,000, that is just over 9% of revenue.
Fictitious figures for Acme Groothandel, a sample wholesaler.
How to read this KPI
More working capital gives more of a buffer, but also means more cash is tied up and cannot be used elsewhere. If working capital grows faster than revenue, look at stock and receivables. Track working capital as a percentage of revenue over several periods to see whether operations are becoming more or less efficient.
Pitfalls with working capital
- Including cash when you want to see operating working capital, which is usually stock plus receivables minus payables.
- Comparing working capital across years without allowing for revenue growth.
- Looking only at the year-end position, which seasonal patterns or actions around the balance sheet date can distort.
SQL & DAX
Calculating working capital in SQL and DAX
Two examples on a fictitious data warehouse for Acme Groothandel: a PostgreSQL query and a measure for a Power BI model. Adjust table and column names to your own model.
WITH months AS (
SELECT (date_trunc('month', d) + interval '1 month - 1 day')::date AS month_end
FROM generate_series(date_trunc('month', current_date) - interval '11 months',
date_trunc('month', current_date), interval '1 month') AS d
)
SELECT m.month_end,
SUM(g.amount) FILTER (WHERE g.account_group IN ('cash', 'receivables', 'inventory', 'other_current_assets')) AS current_assets,
SUM(g.amount) FILTER (WHERE g.account_group = 'current_liabilities') AS current_liabilities,
COALESCE(SUM(g.amount) FILTER (WHERE g.account_group IN ('cash', 'receivables', 'inventory', 'other_current_assets')), 0)
- COALESCE(SUM(g.amount) FILTER (WHERE g.account_group = 'current_liabilities'), 0) AS working_capital
FROM months m
JOIN gl_entries g ON g.entry_date <= m.month_end
GROUP BY m.month_end
ORDER BY m.month_end;Balance = CALCULATE(SUM(GL[Amount]), FILTER(ALL('Date'), 'Date'[Date] <= MAX('Date'[Date])))
Working Capital % of Revenue =
VAR WorkingCapital =
CALCULATE([Balance], GL[AccountGroup] IN {"cash", "receivables", "inventory", "other_current_assets"})
- CALCULATE([Balance], GL[AccountGroup] = "current_liabilities")
VAR Revenue365 = CALCULATE(SUM(GL[Amount]), GL[AccountGroup] = "revenue", DATESINPERIOD('Date'[Date], MAX('Date'[Date]), -365, DAY))
RETURN DIVIDE(WorkingCapital, Revenue365)In ENABLE
Tracking this KPI in ENABLE
In your Power BI dashboard
Define the KPI as a measure in your Power BI model and show it in the portal, with "Last refreshed" next to it. Access profiles and optional row-level security decide who sees which figures.
Custom dashboards (pilot)
Add the KPI as a tile to a custom dashboard, compared with last year. The Dashboard Builder is a pilot and can be switched on per client.
Monthly targets
With the built-in Targets app you set a target for the KPI per month, so you see actuals and target side by side.
FAQ
Frequently asked questions
How do you calculate working capital?
Subtract current liabilities from current assets. With €3,300,000 of current assets and €2,200,000 of current liabilities, working capital is €1,100,000. Take both amounts from the balance sheet on the same date.
What is the difference between working capital and operating working capital?
Working capital covers all current assets and current liabilities, including cash and bank overdrafts. Operating working capital looks only at stock plus receivables minus payables, the part that comes directly from operations. For managing processes, operating working capital is usually more useful.
Is negative working capital bad?
Not always: negative working capital means current liabilities exceed current assets. For businesses that are paid upfront and hold little stock, that can be normal. For others it can signal short-term payment problems.
Further reading
- KPI libraryFinancial KPIs: formulas and examplesFinancial KPIs show how profitable, liquid and solvent an organisation is. The data usually comes from your accounting package or ERP: general ledger entries, invoices and open items.Read more
- ResourcesHow to build a KPI dashboard: steps and examplesA KPI dashboard is an overview of the key figures you use to steer towards your goals, such as revenue, margin, on-time delivery or absenteeism. A good KPI dashboard does not start with the software, but with the decisions it needs to support. You then choose a limited number of KPIs, define them, sketch the dashboard and only then build it.Read more
- SolutionPower BI dashboard portal: share dashboards securelyShare your Power BI dashboards securely in your own portal, with role-based access.Read more
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