Working Capital & Closing Mechanics
The peg, the seasonality behind it, and the closing statement review that decides who pays whom after completion.
Discuss a deal Engagement modelsWhy this gets argued about
Working capital is the most common source of post-completion dispute in mid-market deals. The peg is set on a definition and a reference period — and both are negotiable until they are signed.
- Peg analysis. Twelve-month average, adjusted for seasonality, trend and one-off distortions.
- Definition work. What is in, what is out, and which balances are really debt-like items rather than working capital.
- Closing statement review. Testing the seller's completion accounts against the agreed definition.
- Purchase price adjustment. Calculating the true-up and supporting the position with schedules that tie to source.
Outputs you receive
- Monthly working capital schedule with the reference period and peg calculation visible.
- Seasonality analysis showing the swing across the cycle and its effect on the peg.
- Definition schedule listing each balance and whether it sits in NWC, net debt or neither.
- Closing statement comparison with each variance explained and referenced.
Frequently asked questions
How is the peg normally set?
Most commonly a twelve-month average of monthly working capital, adjusted for seasonality and non-recurring items. The reference period and the definition matter more than the arithmetic.
Can you review a closing statement the other side prepared?
Yes. We test it against the agreed definition and produce a variance schedule with each difference explained and supported.
Do you get involved in the dispute itself?
We provide the analysis and supporting schedules. Negotiation stays with you and your legal advisers, though we will sit on calls to explain the numbers.
Nordic deals — SIE and SAF-T native
The Nordics are our priority market, and the source data there is unusually good once you know how to read it.
- Sweden. We work from SIE4 exports — full transactions and vouchers, not a period summary — and bridge K2/K3 reporting onto the basis you underwrite.
- Norway. SAF-T Financial exports (v1.30 mandatory from January 2025) give the same transaction-level completeness.
- Denmark and Finland. Native general ledger exports from e-conomic, Dinero, Netvisor and Procountor.
- Full CET overlap means same-day turnaround rather than overnight lag.
Peg under negotiation?
Send the monthly financials and the draft definition. We will show you what the numbers actually support.
Book a consult Get the data-request listOr email abhishek.bhandari@zionadvisor.com directly.