Like Seller Finance, many sellers and buyers want to know what is “market” for the amount of net working capital (AR less AP, and a few other items) that is typically included in the price of a business. The table below shows the four-quarter average percentage of transactions that included and excluded net working capital as of 3Q24 based on the IBBA/M&A Source Market Pulse Report. There is a definite shift around $5 million. Also beware that different comparables databases define “Price” differently (some include WC, some exclude), so be careful not to mix and match. Feel free to reach out if you would like to learn more about how your company may be valued and how a transaction could be structured.
