When selling a business, the receipt of offers is one of the most exciting stages in the process. It is vitally important, however, to fully understand the technical language used in these offers and the implications this will have on the value that the vendor ultimately receives.
This article will walk through the key technical terms used in the vast majority of offers for a business.
Cash-free, debt-free, normalized working capital
Almost any offer letter from a credible acquirer will state that the offer is made on a cash-free, debt-free basis, with a normalised level of working capital.