Working Capital

Working capital is the difference between a company’s current assets (such as cash, inventory, and receivables) and current liabilities (such as payables and short-term debt), representing the liquidity available to fund day-to-day operations. Positive working capital indicates that a company can meet its short-term obligations, while negative working capital may signal financial strain. In M&A, working capital is a key focus during due diligence and deal structuring, often tied to purchase price adjustments through a working capital target or peg.

P4i analyses and negotiates working capital requirements to ensure fair value and smooth post-deal transitions in M&A transactions.