Working Capital True-Up: How It Works

Working capital true-up

Also known as: NWC true-up, working capital adjustment, post-closing adjustment, closing statement adjustment

Definition

A working capital true-up is the price adjustment made after closing, once actual closing net working capital is known, to settle the difference between the estimate used at closing and the final figure.

Updated November 2026

Working capital true-up, explained simply

At closing the books are not yet finalized, so the price is set on an estimate. Within a set period, usually 60 to 120 days, the buyer prepares a closing statement, the seller reviews it, and the difference is paid by whichever side owes it. Unresolved items are referred to an independent accountant.

A collar can ignore small differences, an escrow can secure the seller’s payment, and the closing statement must apply the same accounting principles as the peg.

From closing to final settlement

Illustrative

Alder Creek Manufacturing

The estimate and the final figure differ by $0.1 million, so the total adjustment is $0.3 million.

Worked example

Alder Creek, $ millions	Amount
Peg	7.2
Estimated closing NWC	7.0
Price reduction at closing	(0.2)
Final closing NWC (after 90 days)	6.9
Further payment from seller	(0.1)
Total working capital adjustment	(0.3)

Alder Creek Manufacturing, Inc. is a fictional company. All figures are illustrative.

Why it matters in a deal

The true-up protects both sides from paying for working capital that was not delivered. Clear definitions prevent disputes.

Red flags

Vague accounting policies in the purchase agreement
A large estimated closing figure with little support
No escrow to secure a payment owed by the seller

Frequently asked questions

What is working capital true-up in M&A?

Who prepares the closing statement?

Usually the buyer, as it controls the books after closing.

What happens if the parties disagree?

An independent accounting firm named in the purchase agreement decides the disputed items.