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BayState Business Brokers Blog

How is Working Capital Handled When You Buy or Sell a Business?

Posted by Marc Gudema on Wed, Apr 10, 2013 @ 12:45 PM

There are a variety of ways to handle the sale of working capital when buying or selling a business.  In accounting terms, working capital is the difference between current assets and current liabilities.   By working capital, I’m generally referring to the sale of inventory and accounts receivable when a business is sold.  Here is a short primer on the most common ways the purchase of working capital is handled in the sale of a business. 

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Tags: working capital, net working capital, receivables, accounts receivable

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