If Company A is acquiring Company B and they hire a company to do the due diligence, what are typical adjustments that would be made to working capital? thanks,.
Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Interview Partners to connect and practice with!
Back to overview
14
Global
What are typical working capital adjustments that are made for an M&A transaction?
1
2.7k
Be the first to answer!
Nobody has responded to this question yet.
Hi there,
Usually the type of adjustments made relate to positions which are "not normal" in the day to day running of the business. In the case of working capital you would be looking at Receivables (outstanding invoices to customers), Payables (outstanding invoices with suppliers) and Inventories positions in the balance sheet. As an example, if you have a significant equipment sale which has resulted in outstanding Receivables and the business normally sales products, this would be an adjustment to consider.
I hope this helps.
Best, Fernando
