Interview Question - Buyside
What is "Cash Generation"?
Question for context:
"Equity Purchase price of company is estimated at US$30 million, of which US$10 million is to be funded with cash generation and the balance with debt.
Assume last year the company had $50M in Assets, $40M in Liabilities and $3M in cash generation"
Strange wording, my guess is that it’s a closing date adjustment. Ie the cash generated between the effective date of the transaction and the closing date.
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