RT Journal Article
SR Electronic
T1 Working Capital Adjustments: <em>One Size Doesn’t Fit All</em>
JF The Journal of Private Equity
FD Institutional Investor Journals
SP 33
OP 35
DO 10.3905/jpe.2013.16.3.033
VO 16
IS 3
A1 Gene T. Barton
YR 2013
UL https://pm-research.com/content/16/3/33.abstract
AB Most purchase and sale agreements contain one or more post-closing purchase price adjustments, the most common of which is a working capital adjustment. In order to craft a working capital adjustment that is appropriate for a particular transaction, it is first necessary to understand how working capital adjustments actually work. This article looks at why working capital matters and suggests the importance of understanding the accounting implications of typical working capital adjustment provisions. It then makes some practical recommendations as to how to best address this issue.TOPICS: Private equity, exchanges/markets/clearinghouses, fundamental equity analysis