Working capital rate is an important tool for measuring the overall financial health of a business. It is calculated by dividing current assets (such as cash, inventory, and accounts receivable) by current liabilities (debt, accounts payable and other obligations). High working capital rates indicate that a business has enough resources to pay off its debts in a timely manner – making it easier for them to borrow money when needed. On the other hand, low working capital rates can limit a company’s ability to fund short term needs, like payroll, rent and taxes. Therefore, understanding your company’s working capital rate and monitoring changes in this number over time is essential for any business owner or investor.