The M and A Guy

Networking Capital Calculations - What is it? & what is it?


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On this episode of the Private Capital Mastery podcast, Brian Franco and Joe Belden talk about how networking capital is crucial in M&A transactions. They stress the importance of understanding and managing accounts receivable, work in progress, and accounts payable. Joe shares a real-life example where disagreements arose between a buyer and seller due to poor accounting procedures. They highlight how networking capital is essential for buyers and why sellers need to carefully assess their balance sheets. They also discuss the difficulties of aligning perspectives between buyers and sellers.

"Ultimately, networking capital is a function of profitability. There's no better way to be building networking capital than just simply being profitable." - Joe Belden

What you will learn:

  • The significance of networking capital in M&A transactions

  • Challenges with networking capital calculations

  • The importance of profitability in building networking capital

  • Importance of managing projects for profitability

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    The M and A GuyBy Brian T. Franco