Mastering Working Capital Analysis with DealSage

Working capital can make or break a deal. But too often, it’s misunderstood, miscalculated, or simply overlooked. At DealSage, we’ve built a working capital analysis tool that balances flexibility with precision, helping you benchmark, negotiate, and plan with clarity.

Here’s how it works.

Start with the Deal Analysis, Then Head to Working Capital

Once you've run your deal through the main DealSage engine, navigate to the Working Capital tab. Unlike other modules, this one must be run individually, that's because CIMs (Confidential Information Memorandums) often include working capital data inconsistently, and we want to give you control over what you include.

In this SIM, a full balance sheet is included, so once you hit Run, DealSage gets to work.

Confirm the Data, Customize the Inputs

When your results load, the first step is to confirm the numbers were pulled correctly. We pull all balance sheet items, but you control what counts as working capital.

Working capital can be a subjective definition:

• Should cash be included? Usually not.

• Should inventory be included? Depends on the deal.

Using our Working Capital Table Editor, you can:

• See every balance sheet item

• Check/uncheck what should be included

• Filter view to show only working capital components

Once confirmed, DealSage calculates metrics and updates them in real time.

Select Your Time Periods and Evaluate

At the top of the module, choose which time periods to include (typically trailing 12-month averages, excluding projections). Then hit Evaluate Working Capital Metrics.

DealSage will:

• Calculate DSO (Days Sales Outstanding), DPO (Days Payable Outstanding), and DIO (Days Inventory Outstanding)

• Benchmark each metric against industry standards

• Provide performance commentary to guide your diligence

Understand Cash Needed at Close

We go one step further than most tools. DealSage helps you calculate the cash required at close based on:

• Cash conversion cycle

• Fixed operating expenses

• Working capital included (or excluded) in the purchase price

You can simulate negotiation scenarios:

• Will AR be transferred? Check.

• Is the seller keeping inventory? Leave it out.

• Are payables being assumed? Include them.

The result: a clear calculation of how much cash you'll actually need on Day One.

Designed for Searchers and Sponsors

We know every deal is different. That’s why this module is:

• Customizable

• Transparent

• Built for flexible working capital definitions

It’s not a black box. It’s a power tool.

If you’re negotiating working capital in your next LOI, or trying to build a defensible cash-at-close model, DealSage has your back.