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.
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