Is increase in working capital lucrative to valuations?

This is a question recently asked to one of my students who was interviewing for the role of an M&A analyst for a leading mid-market advisory company in London with a focus on IPO’s.

Increase in working capital is a cash outflow and increases the capital required to run the day to day operations of the company. An increase in working capital is a negative for the valuations of the company. Management of public listed companies and Private Equity funds focus on reducing working capital investments of a company as it frees up capital that can be used to pay back equity holders – thus increasing return for investors.

We have an 88% placement rate for our 4 to 8 weeks training programs conducted in 2017/18 with students going on to secure jobs at marquee investment banks such as Goldman Sachs, Credit Suisse, Morgan Stanley, Citi Bank and Deutsche Bank among others. Please send your CV to to check your eligibility for the course.

© City Investment Training 2020

  • YouTube - White Circle
  • Instagram - White Circle
  • White LinkedIn Icon