Working capital peg calculator
The normal level of working capital, and the price adjustment at closing.
MONTH-END BALANCES, LAST TWELVE MONTHS
MONTHCURRENT ASSETSCURRENT LIABILITIES
1
2
3
4
5
6
7
8
9
10
11
12
Month 12 is the most recent. Current assets exclude cash; current liabilities exclude debt and the current portion of loans.
ESTIMATED AT CLOSING
$
$
Reduction in the purchase price
$70,583
Working capital at closing against a peg of $367,583
- Month-end working capital
- Peg
- Closing estimate
Peg, twelve-month average$367,583
Lowest month$324,000
Highest month$418,000
Working capital at closing$297,000
Price adjustment−$70,583
The adjustment moves a price. The price itself starts with a valuation.Get your free valuation
Method and assumptions
An estimate for planning. A sale is priced and taxed on its own facts, confirmed by the seller’s advisors.
- 01Net working capital equals current assets, excluding cash, less current liabilities, excluding debt.
- 02The peg is the average of the last twelve month-end balances, which covers a full seasonal cycle.
- 03The price adjustment equals working capital at closing less the peg. A surplus increases the price and a shortfall reduces it.
- 04The purchase agreement defines the accounts included. The same definitions apply to the peg and to the closing figure.
Free valuations from InvestDeal AI models trained for each industry
Get your free valuationYour financials
IndustryPrecision manufacturing
Revenue$7.2M
Adjusted earnings$1.45M
How buyers price it (three ways)
Revenue multiple0.6 – 0.9×
EBITDA multiple4.5 – 6.0×
Adjusted earnings multiple3.8 – 5.1×
$0.0M – $0.0M
$1.45M adjusted earnings at 3.8 – 5.1×, the multiple this profile earns
Two things would move it before you sell: your largest customer is 38% of revenue, and most of the business still runs through you
What comparable sales cleared at (28 in your sector and size)
Median 4.2×
You, 4.6×
Get an instant valuation based on your financials and comparable sales with our model
How InvestDeal compares with a traditional sale
TRADITIONAL PROCESS
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- Time to interestTRADITIONAL9 to 12 months from listing to close30 daysTo initial buyer interest
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- Buyer reachTRADITIONALLimited to one broker’s personal networkPlatform-wide matchingAcross active buyer demand
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