I'll admit that thinking about NWC pegs makes my head hurt. Situation is seller is an inventory based business that does quasi accrual accounting (cash based with YE adjustments).
Sales are retail credit card, so no A/R, just inventory as an asset.
A/P would be the only liability, but they are not tracking payables, just payments (again, cash based)
If we had A/P by month (and in transit inventory), calc would be pretty straightforward, but alas, here we are.
Anyone that has dealt with something similar, and can you share any sage advice on how best to navigate would be greatly appreciated.
Net Working Capital Peg Nuances
by a searcher from Indiana State University
More on Searchfunder
Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
If not in-house with the business' accounts/book keeping staff, a private firm could probably utilise a junior staff member to undertake it for you. They might also just work to a set threshold (e.g. anything >$5k or whatever you consider reasonable) and get you something materially close the AP position you need.
Alternatively, as its not too complicated a task, you might be able to undertake yourself/with the assistance of a private bookkeeper?