Examples of Working Capital Adjustments in a sentence
There is a question whether Working Capital Adjustments should be made when the results of some comparables can be reliably adjusted while the results of some others cannot.
UNIT-III:RESPONSIBILITY ACCOUNTING:Definition- Steps- Responsibility Centers- Revenue Centre- Profit Centre- Investment Centre- Advantages of Responsibility Accounting- Cost Centres Vs. Responsibility Centres - Transfer Prices- Price Level Accounting- Current Purchasing Power Method- Methods of Accounting for Changing Prices- Working Capital Adjustments- Merits of Inflation Account.
Within ninety (90) days after the Closing Date, Buyer will prepare and deliver to Seller a certificate (the “NWC Certificate”), signed by Buyer, certifying Buyer’s good faith determination of the actual Net Working Capital of the Company as of the Closing Date, and identifying any Net Working Capital Adjustments to the Purchase Price as a result of the actual Net Working Capital as of the Closing Date being greater than (or less than) Target Net Working Capital.
If proposed Working Capital Adjustments are significant, consideration may need to be given to whether the proposed comparable is an appropriate one.
This example also assumes that the same interest rate is applied to payables, receivables and inventory.• The purpose of Working Capital Adjustments is to improve the reliability of the comparables.