How does net working capital impact the valuation of a private business? What happens to a private company's value if there is excess or deficit net working capital? How do you value a private company correctly? What are common valuation mistakes that buyers/sellers make when attempting to value a private company? This is the part 2 video in the private company valuation mistakes video series. We will discuss four more valuation mistakes that I have seen buyers/sellers make in small business/lower midmarket M&A transactions.

[3:26] Quick Recap of Net Working Capital (NWC) & What is "Normal" NWC?
[7:30] Mistake #4: Ignoring NWC in valuation Excess/Deficit NWC on the Balance Sheet
[11:13] Case Study #1
[14:21] Case Study #2
[18:45] Mistake #5: CashFree/DebtFree Closings for NWC intensive or high growth businesses
[22:00] Case Study #3
[26:21] Case Study #4
[32:24] Mistake #6: Confusing book value with enterprise value
[34:14] Case Study #5 & #6
[38:28] Mistake #7: Ignoring the impact of market rent on your business' value
[41:30] Case Study #7

The case studies in this video are from real life past M&A transactions completed by Roblee Capital with some changes to the figures to ensure the confidentiality of our clients.

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Roblee Capital is a Torontobased M&A Investment Bank focused on serving companies with revenues between $1MM to $100MM primarily offering sell and buyside M&A services. We work with Canadianbased business owners looking to sell their lower midmarket business. If you are a Canadian business owner looking to sell or buy, please reach out so we can connect at the link below:

https://www.robleecapital.ca/