Inventory and receivables need conversion into cash. Review asset quality and payment timing separately.
Try this with your own numbersFormula and worked example
Surplus after buffer = current assets − current liabilities − desired buffer
| Input | Example |
|---|---|
| Current assets | 75,000 |
| Current liabilities | 45,000 |
| Desired additional liquidity buffer | 20,000 |
| Calculated result | 10,000 |
Choose reliable inputs
Plan materials, travel and crew time before committing to a price. For this lawn care calculation, use a completed job sheet, supplier quotes and a crew schedule and a consistent definition of one lawn visit.
- Fuel: include the portion belonging to this lawn visit or reporting period, and record where the value came from.
- Equipment wear: include the portion belonging to this lawn visit or reporting period, and record where the value came from.
- Route time: include the portion belonging to this lawn visit or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Is working capital equivalent to money in the bank?
Inventory and receivables need conversion into cash. Review asset quality and payment timing separately.
Current assets may include illiquid stock or disputed receivables; this is not available cash.
What if this input changes?
If current assets rises by 10%, this example changes by 7,500 . This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.