- Decoding Working Capital: An Overlooked Factor in M&A Transactions
-
- When selling a business, the price that a buyer is willing to pay includes all of the assets and certain liabilities of the company, including machinery and equipment, customer and supplier contracts, lease agreements, and goodwill. The purchase price also includes a certain level of working capital required to operate the business. This is why working capital analysis is a key value component and piece of financial due diligence when selling a business. Business owners typically keep a close eye on working capital during normal operations, and during a sale process, it is no less important to monitor trends to avoid unwanted adjustments to the purchase price. In this article, we will discuss how to analyze historical working capital and considerations for M&A transactions.
Join our Community of Member Scholars for tools, courses and exclusive content to develop your skills as a Chief Financial Officer.
Take Your Personalized CFO Readiness Survey by clicking the Take Assessment button below.
Take Assessment Watch Video- Data Lineage 104: Documenting data lineage
-
- In the first three articles (Data Lineage 101, 102 and 103) we have discussed why we need data lineage, what data lineage actually is and what are the key legislative requirements for data lineage.
- The Digital CFO Skill Shift – Evolution of the CFO Suite
-
- If you could start by sketching your team on a blank piece of paper, would it resemble in any way the structure you have today? Would the design you come up with still be relevant considering the rapid changes brought about by the ongoing pandemic? Digitization has become a realistic goal for CFOs and their teams to remain highly relevant, especially when there is an ever more pressing need to react quickly.
Governance & Controls – structure and controls.
Transaction Recording – systems, transaction processing and closing the books.
Reporting - efficient, timely and accurate information for decision making and meeting compliance requirements.
Accounting
Business Planning - provide the financial roadmap for the company with supporting analytics.
Financial Forecasting - integrate the company’s current performance relative to budget with the real-time business environment.
Investment Analysis - the framework to analyze new opportunities as they present themselves.
Finance
Cash Management - the discipline to ensure cash is available to operate the business normally.
Funding - Planning for and raising funds to meet the needs of the business.
Risk Management – Identification and mitigation of key business risks.
Treasury
Self-Awareness - Internal.
Team Building - External.
Strategy & Culture – Motivate people to follow you.
Leadership
Four Pillars of Executive Expertise
CFO.University is built around the Four Pillars of CFO Success. These Pillars are supported with Core Competencies. Our framework allows you to master your role as a senior financial officer. The Four Pillars are made up of:
Accounting – Governance & Controls, Transaction Recording and Reporting
Finance – Business Planning, Financial Forecasting and Investment Analysis
Treasury – Cash Management, Funding (Capital Raising) and Risk Management
Leadership – Self Awareness, Team Building and Strategy & Culture
