Advisor Toolkit · by Thinkerz
Completion & Working Capital
Preparation Pack
A short working guide to help an adviser and business owner gather the information normally needed for a working-capital peg, minimum-cash and, where relevant, completion / equity-bridge analysis.
How to use this pack
Use it during early adviser/client discussions to identify what information is available and what may need to be obtained from the accountant or finance team. It is a preparation aid only; confidential documents should not be emailed to us. Once instructed, we provide a secure online information request for formal submission.
Why this matters: the analysis is evidence-led. Better source information means we can rely more heavily on the business’s actual trading history and less on assumptions, producing a more defensible working-capital and minimum-cash position.
01 — Transaction stage
Which position are we preparing for?
Pre-deal planning
No buyer terms yet. Establish the normal working-capital peg, minimum cash and likely balance-sheet treatment before negotiations.
Deal in progress
A buyer proposal or live transaction exists. Test the proposed terms and, where the information allows, quantify the completion and equity-value effects.
02 — Core financial pack
Information to start gathering
Where possible, use reports exported directly from the accounting system rather than re-keyed figures.
Monthly management accounts
Latest 24 months where available (minimum 12 months), including monthly P&L and balance sheet.
Why: This is the main evidence used to identify the normal working-capital level, seasonality and unusual month-end movements. More complete monthly history usually means less reliance on assumptions.
Latest detailed trial balance
The latest detailed trial balance so aggregated balance-sheet and overhead headings can be understood and classified.
Why: The trial balance lets us see what sits behind broad headings such as other debtors, accruals or other creditors, which reduces the risk of classifying an item incorrectly.
Latest two years’ statutory accounts
Used as a cross-check against the management information and for accounting context.
Why: These help us reconcile the management information to the filed financial statements and understand the accounting treatment used by the business.
Latest/current management accounts
Only needed if the monthly pack above does not include the latest available month.
Why: A current balance sheet makes sure the analysis is anchored to the latest available financial position rather than an older month-end.
Stock / WIP breakdown
Only where stock or WIP is material.
Why: Where stock or WIP is significant, the breakdown helps us distinguish normal operating levels from unusual builds, obsolete balances or project timing effects.
Finance and connected-party balances
Schedule of borrowings, HP/finance leases, invoice finance and director/shareholder loans, where applicable.
Why: These balances may sit outside normal working capital and can affect minimum cash, debt-like treatment and the eventual equity bridge.
03 — Business context
Points the accounts may not explain
Note anything that could make the historical figures unrepresentative. These explanations help us distinguish normal operating requirements from temporary or exceptional balances.
Is the business materially seasonal?
Seasonality can make a simple average misleading. Understanding the trading cycle helps us judge what level of working capital is genuinely normal.
Were there any abnormal trading periods in the financial history supplied?
Exceptional periods can distort the historical average. We need to know about them so they can be considered rather than treated as normal.
Were there any material one-off movements in stock, debtors, creditors, accruals or deferred income?
Large one-off movements may need to be normalised rather than allowed to influence the working-capital peg.
Have normal customer or supplier payment terms materially changed during the period?
Changes in payment terms can permanently change the amount of working capital the business needs to operate.
Does the business receive material customer deposits or payments in advance?
Advance receipts may be part of normal trading, but they need to be identified correctly so they are not misclassified in the analysis.
Are there material balances involving directors, shareholders or connected parties?
Connected-party balances often require separate treatment and may not form part of normal operating working capital.
Are there material assets or liabilities that do not relate to normal trading?
Non-operating items should normally be identified separately so they do not distort the working-capital requirement.
Have there been material changes in accounting policies or how balances are recorded?
A change in accounting treatment can make historical months look inconsistent even where the underlying economics have not changed.
Are there known exceptional, disputed, overdue or non-recoverable balances that could distort normal working capital?
These balances may not be representative of normal operations and may need to be excluded or adjusted.
Are there unusual cash commitments or timing requirements that should be considered when assessing minimum operating cash?
Minimum cash should reflect the real operating cash cycle, including known timing pressures that are not obvious from a single month-end balance.
04 — If a deal is already in progress
Additional transaction information
Only gather what actually exists. Do not estimate or create transaction terms that have not yet been agreed.
Transaction terms
Latest offer, Heads of Terms, SPA draft or other document setting out the proposed price and completion mechanics.
Why: We need to compare the financial evidence with what the buyer is actually proposing, particularly the working-capital peg, cash/debt definitions and completion mechanism.
Estimated / actual completion balance sheet
Upload if one has been prepared. If not, we can work from the latest available balance sheet and state that the completion position is estimated.
Why: This is the balance sheet to which the agreed peg, cash and debt adjustments are ultimately applied. Without it, the completion position can only be estimated.
Quick checklist
Use this as the short-form list when speaking to the accountant or finance team.
Outstanding / unavailable information
Important: This pack is for preparation only and is not a substitute for the secure online information request. If something genuinely is unavailable, note that rather than inventing or estimating figures. Any material limitation can then be identified in the analysis.
Confidentiality: Please do not email completed worksheets or sensitive financial documents to us unless a secure method has been expressly agreed. Once instructed, Advisor Toolkit / Thinkerz will provide a secure submission link.