Executive & Board / Corporate Finance
Net Working Capital Peg NWC Peg (the working-capital target in a deal)
The normalized level of working capital a buyer expects delivered with an acquired business, and the benchmark that adjusts the purchase price at closing.
The fork, why two teams get different numbers
Outside a deal, "net working capital" itself forks between the textbook current-assets-minus-current-liabilities and the operating definition that excludes cash and debt (since most deals are cash-free, debt-free).
In the Metric Library
- The full fork, both definitions worked all the way through
- The trap that makes the number lie, on a real export
- Every formula variant, spelled out
- The reconciliation anchor, what to tie it to and when to refuse
Reference: FASB ASC 805 (Business Combinations) · M&A purchase-agreement convention, no single authoritative accounting standard for the peg