Can someone explain why there is a closed loop regarding cash and collectibility, regarding working capital and artificially building up inventory to increase the peg. May be applicable to other financial line items. Thanks

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It’s a closed loop between cash and NWC because you can’t increase inventory without spending cash (or building AP / accruals).

That said I’m not sure I fully track where the question is coming from, no seller would want to artificially increase the peg - that would mean either leaving behind that value either through maintaining unnecessarily elevated inventory through close or getting dinged via the nwc true up when closing inventory is lower than the amount in the peg. If sellers are going to try to manipulate nwc it will be to artificially lower the peg

No seller, or competent investment banker, pushes for an artificially high NWC

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