How do you calculate optimum level of current assets?

It depends on many factors.

The demand for the product. when the demand for the product is established. then you make projections for sales.

The Return on investment should be high. its a results of net profit/(current assets + fixed assets). The ROI will be high when the denominator is low. So when you keep current asset level low at the year end. the ROI will be high.

You can keep the current assets level low only when your cash conversion cycle(CCC) is shorter. you can have shorter CCC. only when the Inventory turnover, and Recievables turnover are high and payables turn over is low (or) Inventory turnover, and Recievables turnover are low and payables turn over is high (if you have good credit terms with suppliers).

Over the years it was a bone of contention for many finance manager on how to manage an optimum level.still a lot of work is going on to find out the optimum levels for current assets.