Working Capital

Working capital has a broad definition, but traditionally represents the difference between current assets and current liabilities, with requirements varying between companies, even within the same industry. These differences can result in difficulties between two parties when agreeing upon an amount in conjunction with the sale or purchase of a company. Several common issues often arise between the letter of intent and the final purchase agreement that could place a potential deal in jeopardy. This is why it's crucial to have a keen understanding of working capital management.

A company that is considering entering into a deal must consider several factors involving working capital management, and establish precise targets and definitions to protect themselves against miscalculations during negotiations. This white paper helps to illustrate the importance of working capital from company to company and outlines successful strategies for reaching an agreement and reducing the likelihood of future disputes.

The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.