Working Capital Analysis and Purchase Agreement Assistance
Balance sheet analysis to establish target working capital and evaluate balances delivered at closing.
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 an acquisition or refinancing.
Our analysis may include procedures such as:
- Analyzing historical trends and discussing significant fluctuations in key balance sheet accounts (e.g., accounts receivable and payable, inventory, prepaids and accrued expenses, etc.) and the impact of non-recurring items included within current and prior reporting periods
- Assessing the adequacy of reserves for accounts receivable and inventory Understanding the target’s accounting policies and consistency in the application of GAAP to determine if changes will impact working capital
- Assessing the impact of contractual arrangements on 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 resulting impact on working capital needs
- Analyzing deferred revenue to better position our clients for negotiations related to cash to be left in the business at closing
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Comprehensive Due Diligence Solutions
Our Comprehensive Due Diligence solutions help clients minimize risks and make the most informed business decisions. We support in the areas of tax, compliance and regulatory, operations/strategy, M&A, financial and accounting, investigations, disputes and cyber/IT risk.
Financial Due Diligence
Kroll's Financial Due Diligence team provides Quality of Earnings (QoE) and other key financial analyses for buyers, sellers, lenders and investment banks in M&A transactions.
Operational Strategy Advisory
Kroll advises on operational process improvement to increase efficiencies in transaction, expansion and turnaround situations that ultimately increase valuation.
Mergers and Acquisitions Tax Services
Kroll’s M&A tax practice brings deep experience executing thousands of transactions across industry verticals to deliver practical M&A tax solutions in partnership with our clients. Kroll understands M&A is often the cornerstone of value creation, and we tailor customizable and scalable solutions to enhance value across the transaction lifecycle.
IT Transaction Advisory Services
Kroll helps firms identify target’s technology risks, synergies and investment needs to support informed decision making in transactions
Accounting Advisory
Kroll's specialist Accounting Advisory Team combines technical accounting expertise with practical, commercial deal experience to help clients manage the process of accounting and financial reporting for a transformational event.
