Hi,
I have a question regarding working capital/net debt and restricted cash.
Say a company have 200 in debt and 100 in cash where 50 of them is restricted because they PROBABLY have to be paid to customers at a later point. Ie. these 50 also has a payable account on the balance.
My question is; 1) when calculating working capital and net debt for purchase price adjustments reasons - will only the operating cash be included in the net debt calculations? Ie. will net debt be 200-50 og 200-100?
2) And, if 25 of those payables will be classified as debt instead, would the net debt be 200-175, 225-175, 200-150 or 225-150?
3) And what happens with net working capital in question number 2? The liability side will be reduced by 25 and the asset side will remain the same?
I cant get my head around this. Thanks in advance for replies.
Nostrum architecto provident quibusdam quibusdam. Beatae rem sequi maxime ut. Quia voluptatem corrupti molestiae aut. In voluptatem dolorum sed corporis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...