Working Capital
Current assets minus current liabilities — the operating liquidity that should stay with the business at closing.
Last updated September 5, 2026
Working capital usually means cash needed for daily operations, plus receivables and inventory, minus payables and other current liabilities. Purchase agreements often set a target working-capital amount and adjust price if the actual amount at closing is higher or lower. Asset sales may define working capital narrowly or exclude cash; buyers must read the definition, not assume GAAP current assets. Under-funding working capital is a common reason a newly purchased shop feels “tight” in the first months.