In the context of M&A or business/company purchase and sale transaction, the purchase price seems to be based on one of either cash free, debt free basis with working capital adjustment or net asset basis of a company.
Why would a purchaser chose one over the other / what factors would be taken into account in deciding the basis of the business valuation
Isn’t net asset and working capital potentially the same thing?
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Working capital is the net of the **current** assets and liabilities (cash, short-term debt, receivables/payables, inventory, and anything else that typically turns over within a year).
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