Target has a large cash balance, but a lot of cash is required to run the business. If I modeled a take private LBO, I'd use "Balance Sheet Cash: Current Cash Less Min Cash" in the Sources column, and I would have a "Fund Cash Balance: Min Cash" in the Uses column.
Does that make sense in a takeover of an SMB? What's the "right" way to model balance sheet cash in these transactions?
Somehow I'd think a seller would just say, "No, that's my cash, you can't use it to pay me!"
Balance Sheet Cash
by a searcher from Harvard University - Harvard Business School
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1) If there is deferred revenue, customer deposits, pre-paid subscription, etc. (collectively DR), buyer should assume such liability and should get needed cash to cover the cost servicing the obligation and associated profit.
2) In rare occasions, even when DR is absent, buyer is entitled to get some cash to cover certain unpaid obligations.
In your case, seller or his/her advisor, is entitled to say, "That is my cash".
I teach this topic in detail and have helped small and large deals including when Big 4 CPA firm is involved. happy to help.
(Note: If seller is a C Corp with excess cash and the structure is an Asset sale, then there is one more variation to minimize seller taxes.)