Non-operating working capital

Non-operating working capital comprises working capital items unrelated to the normal operating cycle — exceptional tax receivables, dividend receivables, shareholder current account balances, security deposits. In financial due diligence, it is isolated from operating working capital because it reflects one-off or structurally different items that should not be included in the normalised working capital reference used in price adjustment mechanisms. Its treatment in the net debt bridge — inclusion as debt-like or cash-like — is often a negotiating point between buyer and seller.

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Example: due diligence on a Swiss hotel group identifies CHF 420,000 of non-operating working capital comprising a commercial lease deposit (CHF 250,000) and an exceptional VAT receivable (CHF 170,000). These items are excluded from the normalised working capital reference and treated as cash-like items — added to the equity value bridge rather than included in the working capital adjustment calculation.

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Hectelion precisely defines the boundary between operating and non-operating working capital in every due diligence to prevent ambiguities in price adjustment mechanisms.