Comments on: Working Capital Series: Valuation

By: Working Capital Series: Improvements and One-Off Cash Wins | Reaction Radio

Working Capital Series: Improvements and One-Off Cash Wins | Reaction Radio — Sun, 08 Nov 2009 13:23:08 +0000

[...] previously harped on about how working capital drives an investee’s value (see, Working Capital Series: Valuation). It receives this attention because it can affect value more than we often want to believe. [...]

By: Working Capital Series: Improvements and one-off cash wins | A Private Equity Blog

Thu, 05 Nov 2009 23:49:09 +0000

By: The Private Equiteer

The Private Equiteer — Thu, 13 Aug 2009 01:17:22 +0000

Thanks for the note Joseph. Yes, that’s right. If you only used CA-CL, the DCF may be affected by non-operational cash movements. For example, if the business borrowed $10m from the bank and the $10m went into the cash account, you’d see a big spike in the changes of CA-CL. The same goes for dividend payments, cash contributions, capex, etc. All of these things can affect CA-CL and not show a true picture of working capital requirements. By using CA-cash-CL, we get a better picture of operational working capital.

By: Joseph

Joseph — Wed, 12 Aug 2009 19:21:46 +0000

In the DCF equation, the working capital delta is calculated utilizing which formula? I would assume CA-Cash-CL, as you want the cash absorbed by the business included the DCF.

By: Working Capital Series: Valuation | The Private Equiteer – A … | India Updates

Sun, 02 Aug 2009 20:34:47 +0000

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By: Working Capital Series: Introduction | The Private Equiteer - A Private Equity Blog

Tue, 28 Jul 2009 00:08:36 +0000

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