In a private equity transaction working capital Must be “normalized” to arrive at the working capital PEG for the purchase agreement. How you work towards a normalized level of working capital will vary from one transaction to the next, but the variables that most frequently make this calculation challenging are the company’s rate of growth and exposure to seasonality.

To understand why, in this video we will explore a business with highly seasonal revenue and a business with little seasonality.

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Definition of Working Capital
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The Working Capital Adjustment
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How Seasonality Impacts Working Capital
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