Understanding working capital as a small business owner can help you grow your business or take advantage of bigger opportunities.

Parties to a business transaction, whether structured as a purchase of equity or assets, typically agree on a method to adjust the purchase price based on the net working capital of the acquired ...

Net working capital is positive if short-term assets exceed liabilities. Yearly net working capital change occurs from balance sheet variations. A significant increase in accounts payable can reduce ...

A company's net working capital is the amount of money it has available to spend on its day-to-day business operations, such as paying short term bills and buying inventory. Net working capital equals ...

This article is part of a continuing series on recurring issues of critical importance to sellers in private company M&A. Previous topics include equity rolls. Net Working Capital (“NWC”) targets and ...

When selling your business in the lower middle market (more than $2 million in enterprise value), the value is usually based on a financial calculation — a multiple of EBITDA (earnings before interest ...

Net working capital (“NWC”) is often a highly scrutinized component in M&A deals and can significantly impact the purchase price. NWC represents the liquidity a company needs to run its day-to-day ...

When selling your business in the lower middle market ($2 million+ in enterprise value), the value is usually based on a financial calculation—a multiple of EBITDA (earnings before interest, taxes, ...

Working capital is the amount of money a company has available in short-term liquid assets. It determines a company’s immediate liquidity and is often used to manage cash flow and for other forms of ...

Andrew Bloomenthal has 20+ years of editorial experience as a financial journalist and as a financial services marketing writer. Thomas J. Brock is a CFA and CPA with more than 20 years of experience ...

Working capital measures financial health by subtracting current liabilities from assets. A current ratio above 1 indicates adequate working capital, reflecting company stability. Excessive working ...