WC assumptions on a deal

I was listening to Orlando Bravo do a paper LBO in one of their podcasts and they were going over sources and uses, I know he was being very loose with it but he mentioned negotiating a good working capital. What does he mean by this/how does this work?

4 Comments
 

Bump. On what grounds is WC added to the purchase price? I’m assuming it is relevant because WC is the net value of assets that could be quickly liquidated?

I also see that WC is defined in different ways such as net working capital or operating working capital, some which use cash, current portion of LTD, and some that don’t.

I don’t mean to hijack OP’s question but this coincidentally was on my mind earlier.

 

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