What working capital is for
Operating working capital generally describes short-term operating assets and liabilities used to run the business, subject to definitions that depend on the transaction. It is different from cash, debt, and owner distributions.
A closing adjustment may use a target
A purchase agreement may compare working capital at closing with an agreed target. The calculation depends on which accounts are included, how they are measured, and any seasonality or one-off conditions.
Roofing-specific questions
Accounts receivable, retainage, customer deposits, work in progress, contract assets, inventory, payables, accrued payroll, and warranty items may require careful definitions. The right treatment depends on the company and contract.
Review the definition and process
The schedule, accounting policies, estimated statement, objection period, and dispute process can materially affect the result. Have your transaction counsel and accounting adviser review the actual documents.