I have a question regarding working capital and DCF valuation. Let's so you're trying to value a carveout of a parent company, and for valuation purposes you consider working capital to be AR, Inv., and AP. Suppose the carve-out balance sheet shows intercompany receivables and payables, in addition to normal trade receiveables and payables. Should those intercompany balances be included in your calculation??

Thanks!

Question

I have a question regarding working capital and DCF valuation.  Let's so you're trying to value a carveout of a parent company, and for valuation purposes you consider working capital to be AR, Inv., and AP.  Suppose the carve-out balance sheet shows intercompany receivables and payables, in addition to normal trade receiveables and payables.  Should those intercompany balances be included in your calculation??

Thanks!

anonymous · Answer

no Intercompany Data should not be included

anonymous · Answer

The Logic is that , while consolidation the financial  statements of the company and its subsidiary,these datas are taken care of.Hence Normal trade paybles and receivable should be used...''

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