Working capital calculation formula is used to determine the short-term financial health of a business. It shows how much money is available to a company to pay its short-term debts and other operating expenses. The formula is calculated by subtracting current liabilities from current assets. This helps a business monitor whether it has enough resources to cover its short-term obligations and determine if it should be investing or borrowing more money. In order to maximize profits, businesses need to use the working capital calculation formula on a regular basis to ensure that they are making sound financial decisions.