Working Capital Analysis

Kroll focuses on the key value drivers and risk areas to enable efficient and effective analysis of historical financials.

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We assess the accuracy of Management’s projections and working capital requirements by analyzing the reasonableness of their assertions, any impact in changes to key assumptions, the timing and the quality of projected future revenue streams and their plans to support future business operations. We provide support based on our findings and assist our clients’ legal advisors in drafting financial and accounting sections of the purchase, sale or debt agreement in a refinancing or acquisition.

Our analysis may include procedures such as:

  • Analyzing historical trends and discussing significant fluctuations and the impact of non-recurring items included within current and prior reporting periods (i.e., Quality of Earnings)
  • Understanding the Target’s accounting policies and consistency in the application of GAAP to determine if changes will impact working capital
  • Assessing the propriety of assets
  • Assessing contractual arrangements impact on the financial statements, particularly key customer and vendor agreements
  • Inquiring as to contingent liabilities, off-balance sheet items and related party transactions 
  • Analyzing cyclicality of the Target’s business and assessing working capital needs based on quality of cash flows
  • Analyzing deferred revenue to better position our clients for negotiations on cash to be left in the business at closing
  • Assisting in setting the working capital requirements
  • Understanding required maintenance and expansion Capital Expenditures
Related Team

Connect with us

Raphael Ray Newman
Raphael (Ray) Newman
Managing Director and Global Head of Transaction Advisory Services
New York
Phone
Anthony Berkus is a managing director at Duff & Phelps.
Anthony Berkus
Managing Director
Transaction Advisory Services
Los Angeles
Phone
Marc Chiang
Marc Chiang
Contractor
Transaction Advisory Services
San Francisco
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Kevin Katz
Kevin Katz
Managing Director
Transaction Advisory Services
New York
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Mark Kramer
Mark Kramer
Managing Director
Transaction Advisory Services
Chicago
Phone
Geon Lee
Geon Lee
Managing Director
Transaction Advisory Services
Boston
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Paul Martin
Paul Martin
Managing Director
Transaction Advisory Services
London
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Brian Sipes
Brian Sipes
Managing Director
Transaction Advisory Services
Dallas
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Kurt Steltenpohl
Kurt Steltenpohl
Managing Director
Transaction Advisory Services
New York
Phone
Ekaterina Timaeva
Ekaterina Timaeva
Managing Director
Transaction Advisory Services
New York
Phone
Sam Wright
Sam Wright
Managing Director
Transaction Advisory Services
New York
Phone

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