What we usually see when a buyer starts looking at the books
By Chris Greco, Founder and President.
When a buyer starts looking at the books, the first thing they measure is the one thing the seller never has: working capital, month by month, for the trailing twelve months. The target they set becomes a price adjustment at close.
Then come the add-backs. Every owner expense without documentation is argued to zero. Then receivables over 90 days and inventory that has not moved. Each finding lowers the price or raises the escrow.
Twelve months before a sale, measure working capital monthly, document every adjustment, and clean up what you already know is wrong. What a buyer finds in the first week sets the tone for everything after.
Chris Greco
Founder and President, CFO Anywhere. CFO for owner-led companies since 2002. Executive MBA, Gies College of Business, University of Illinois.
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