Can anyone shed any light on best practices for determining a reasonable estimate of a company's working capital requirements? - I'm mostly interested in this in a restructuring context for adjusting a company's working capital when it gets out of wack due to financial distress.
Also interested if anyone can shed any light on optimally determining the minimum cash level that a company should maintain for an lbo model. I know working capital requirements and minimum cash levels will vary across industries, so generally is the best method to calculate NWC and Cash as a percentage of assets for market comparables and the company's historical NWC/cash levels (pre-distress/pre-LBO) and use that?
Appreciate any insight and thanks in advance.