10/19/2026
The purchase price in a signed agreement is rarely the amount that changes hands. A separate calculation decides that, and it runs after the closing.
Consider a business owner selling their company. The price is agreed, the agreement is signed, and the wire arrives. What the owner has not focused on is the working capital adjustment. The deal assumes the business will be delivered carrying a normal level of working capital, a target is set for that amount, and the actual figure at closing is measured against it. If actual comes in below target, the difference comes back out of the seller's proceeds.
Two things decide that number, and neither is the headline price. The first is how the target was set. A trailing average pulled from a period that does not resemble the business today produces a target the company cannot realistically hit. The second is the definitions. What counts as a current asset, whether aged receivables are included at full value, how deferred revenue and accrued items are treated, and which accounting principles govern the calculation are all defined inside the agreement, and reasonable people applying different definitions arrive at different figures.
Then there is the mechanism for disagreeing. Who prepares the closing statement, how long the other side has to object, what happens to amounts not in dispute, and whether an independent accountant resolves the gap are the terms that determine how a post closing disagreement actually ends.
The adjustment is not administrative cleanup. It is a term that moves real money, negotiated at the same table as the price and usually with a fraction of the attention.
Dawda's corporate team works through the working capital mechanics, for buyers and for sellers, while the definitions are still open.
