Course overview

Net Working Capital Defined  
NWC and the Cash Conversion Cycle
Ways Businesses Finance NWC Needs 
How NWC Needs Vary Across Industries & Businesses
NWC Optimization
Fluctuations In NWC as Sources & Uses of Cash

The Multiple Ways NWC Can Impact Purchase Price
NWC’s Impact on Free Cash Flow (“FCF”)
NWC as a Purchase Price Adjustment Mechanism
How to Think About “Normal” Levels of NWC in a Business
NWC and NWC Targets in Seasonal Businesses
Analogy: How to Think About NWC as Gas in the Car
How NWC Targets Get Negotiated in M&A Transactions
Buyer vs. Seller Perspectives and Motivations
Three Junctures When NWC Typically Gets Calculated During a Sale Process
Impact of NWC Target on “Same Price” Offers
How NWC Targets Are Usually Calculated
Considerations for NWC Targets Expressed as a Discrete Value vs. as a Formula
Select Best Practice Tips for Buyers and Sellers
Managing NWC Tighter Post Close as a Valuation Creation Strategy

Exercise: Adjustments to NWC
Determining Adjustments to NWC: Review Common Categories Checklist
Cash-free, Debt-Free Considerations
Income Tax Asset & Liability Adjustments
Sub-Account Detail & Trial Balance Level Analysis
Management Fee Adjustments
One-Time, Non-Recurring Items Adjustments
Accounting Considerations as Possible NWC Adjustments
Special Considerations: Seasonality
Special Considerations: Negative NWC Businesses
Special Considerations: Impact of Significant Revenue Growth or Decline on NWC
Special Considerations: Project Based Businesses and NWC
Comparing Adjusted vs. Unadjusted NWC—Building Intuition
Guiding Question to Determine Inclusion or Exclusion of an Account from NWC Analysis
NWC Negotiating Tricks & Other Practical Considerations
One-Way vs. Two-Way Tests
Collars and Caps
Locked Box Mechanisms as an Alternative to NWC Mechanisms

Certificate

Certificate upon course completion.

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