Working Capital Peg Calculator

Model your peg before you sign

Enter 12 months of Net Working Capital (NWC), pick a methodology, and see the peg computed five different ways side by side, with your projected delivery at close and the dollar risk under the method you picked.

Your trailing 12 months of Net Working Capital

Net Working Capital (NWC) is current operating assets (Accounts Receivable, inventory, prepaid expenses) minus current operating liabilities (Accounts Payable, accrued liabilities). Exclude cash and interest-bearing debt. Enter the balance at the end of each month.

Upload CSV (two columns: month, nwc)
Sum: $0 across 0 months
Enter at least 10 months to compute a trailing average.

Buyer's proposed peg methodology

If the term sheet uses language you do not recognize, pick the method closest to what the buyer proposed. The result shows all five computed side by side so you can see the swing either way.

The default averages all 12 months you entered. Picking a method changes which months weight into the peg.
Drives the 3-month trailing calculation and the projected delivery at close. Pick a reasonable guess if close is unscheduled.
At least one month must be excluded, and at least six months must remain, for this method to produce a defensible average.
Use M1 through M12 to reference the 12 monthly cells (M1 oldest, M12 most recent). Supported operators: + - * / ( ). Numeric constants allowed. No variables or functions.
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Options

Optional context that changes how the peg and projected delivery are computed.

If your business has seasonal AR or inventory swings (Q4 inventory build, Q1 AR aging, etc.), this applies a seasonal index based on where the close month sits in your annual cycle. Recommended if your 12 months swing more than 20% off the annual mean.
Your entered months swing more than 20% off the annual mean, which suggests seasonality. Turning on the seasonality adjustment is likely to produce a more defensible peg given your close month.
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The total deal value from the Letter of Intent (LOI) or term sheet. Used to size the risk callout, not to change the peg math.
Pick a timeframe to continue.
Your chosen methodology produces a peg of
$0
Projected delivery at close
$0
What you could lose at close
$0
Methodology Computed peg Delta vs chosen
Buyers propose the methodology that favors them. Your position in the Letter of Intent (LOI) starts with the methodology you accept.

How this tool works

This calculator models the mechanics of how working capital pegs are computed. It does not predict what your buyer will propose, how a dispute will resolve, or what the final post-close adjustment will be. Buyer behavior, measurement disputes, and negotiated carve-outs sit outside this model.

The projected delivery and loss figures assume your most recent 3-month trend holds through close. For a transparent walkthrough of the mechanics on a worked example, see the $20M deal example or the full explainer.

Is this peg fair? Score your proposed peg against the 7-question decision framework. What if my delivery is below the peg? Seven short answers on what actually happens if you fall short at close. Have your LOI peg reviewed confidentially No cost, one call, 20 minutes. Erik Pettine's team reads peg schedules every week.

Have your Letter of Intent peg schedule reviewed confidentially

No cost. One call, 20 minutes, non-public. Share as much or as little as you want.

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Deeper reading on the peg mechanic

The full explainer, the decision rubric, and related mechanics that sit alongside the peg at closing.

Pillar The working capital peg explained What owners lose at the closing table, and the four negotiation levers that move the number. Decision Is this peg fair? A 7-question rubric to score the peg proposed in your Letter of Intent (LOI). Q&A Peg questions and answers Seven short answers to the questions owners most often ask about the peg. Example $20M deal: a worked peg example The math on a $500k shortfall, walked line by line with the owner's remedies. Article Quality of Earnings The diligence process that shapes the peg definition before you ever see a number. Article What moves your sale price The structural factors that drive enterprise value, including the peg's role at close.
Estimate based on the inputs you provided. Actual peg outcomes depend on the final purchase agreement language, Quality of Earnings adjustments, and negotiated carve-outs. This tool models the mechanics; it is not a prediction of buyer behavior or negotiation outcomes. This is not investment, tax, or legal advice.