Virtus Diligence

Working Capital Analysis

Achieve a clear insight into cash flow and liquidity dynamics through precise working capital analysis—ensuring confidence in financial stability as you finalize your transaction.
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MANAGE CAPITAL WITH CONFIDENCE

Ensure adequate capitalization and operational liquidity.

Our working capital analysis ensures buyers are adequately capitalized and the business has sufficient liquidity to sustain operations post-close. We provide a strategic review of accounts receivable, inventory, accounts payable, and cash conversion cycles, identifying liquidity issues and advising on creative deal structures to address capital shortfalls.

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Our experienced team of financial accountants and operators with extensive private equity backgrounds delivers clear, actionable insights, enabling you to structure transactions confidently, knowing liquidity needs are thoroughly addressed.

"Virtus' working capital analysis showed us we'd be undercapitalized post-close. They proposed a creative deal re-structure to help address the issue without stalling our deal. Their experience was great, very helpful."
INDEPENDENT SPONSOR, ACQUIRED A MANUFACUTRING FIRM
OUR WORKING CAPITAL ANALYSIS

What we hope to achieve.

Have full confidence that you'll be adequately capitalized and stable post-close.

  • Enhance Liquidity Management

    Improve cash flow forecasting and manage liquidity efficiently to ensure operational stability.

  • Optimize Cash Conversion Cycles

    Pinpoint inefficiencies and recommend improvements to accelerate cash inflows and defer outflows.

  • Identify Working Capital Risks

    Gain clarity on potential risks associated with receivables, inventory, and payables to mitigate unexpected surprises post-close.

  • Structure Creative Solutions

    Develop strategic deal structures to resolve identified liquidity issues, ensuring the transaction proceeds smoothly.

What we'll do.

Deliver thorough, clear, and strategic working capital assessments that instill confidence.
Includes:
  • Detailed review of receivables, inventory, and payables.
  • Analysis of historical working capital trends.
  • Cash conversion cycle optimization recommendations.
  • Creative structuring to address liquidity gaps.
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Frequently asked questions.

If you have any further questions don't hesitate to reach out to us, we're always on hand to help.

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Why is working capital analysis important for transactions?

It ensures the business maintains adequate liquidity post-close, preventing operational disruptions and unanticipated capital requirements.

How long does a working capital analysis take?

Typically, our comprehensive working capital analysis can be completed within 7-14 days (not business days), depending on complexity and data availability.

Can working capital analysis affect deal terms?

Yes, insights from the analysis can significantly influence deal structures, particularly around working capital adjustments and post-closing capital requirements.

What information do you need to conduct working capital analysis?

We require historical financial statements, detailed ledgers of receivables and payables, inventory data, and any existing forecasts or budgets.

What happens if liquidity issues are found?

We proactively provide creative solutions and strategic structuring options to address liquidity shortfalls, enabling the transaction to proceed smoothly.

Virtus Diligence