Net working capital represents the money tied up in the daily operations of the business. This includes both current assets and current liabilities. On the current assets side, we typically include accounts receivable, inventory, and prepaid expenses as part of net working capital. All these items w...

Some of the most important due diligence is done on the industry, and this can include competitor analysis, pricing trends, volume analysis, and speaking with industry experts. Due diligence will also be done on the company’s growth and cost strategy, customers, customer contracts, products, distr...

The due diligence process for an M&A deal typically involves questioning and confirming all key aspects of the business, especially the growth trajectory of the business and industry. PE firms will often hire 3rd parties to help out with different aspects of due diligence. Some of the most impor...

If it’s a public company, you can look up the cost of debt on Bloombergor in their company filings. Different types of debt are often listed in thenotes to the financial statements in a quarterly or annual report and theinterest rate is sometimes provided. If it’s a private company, you can crea...

Beta comps can be used to find beta for a private company or a newcompany with not enough public trading history. The four steps to do this are:...