Working Capital Peg
The amount of operating cash and inventory you have to leave in the business at closing — often a surprise to sellers.
Definition
The working capital peg determines how much operating capital you have to leave in the business at closing — and it's one of the most common surprises sellers encounter at the closing table.
What It Means For You?
Buyers don't see the peg as a negotiation tactic — they see it as basic operational reality.
Buyer's Lens
What the buyer is doing in the peg calculation is making sure they don't have to fund operations on day one out of their own pocket.
Glossary
Exit Desk
Mike Ye