Glossary · Valuation and finance
Completion accounts
Also called closing accounts
Definition
Completion accounts are drawn up after closing to show the company's actual cash, debt and working capital on the closing date. The price is then adjusted up or down against the estimate. It is more accurate than a locked box, but takes longer and often leads to disputes.
Related terms
Locked box A way of fixing the price on a past balance sheet date, with no adjustment after closing. Net working capital Current assets minus current liabilities: the cash tied up in running the business day to day. Earn-out Part of the price that is only paid later if the business hits agreed targets after the sale. EBITDA Earnings before interest, tax, depreciation and amortisation: the profit figure most deals are priced on. Escrow Money held back from the price by a third party, released later if no claims are made. Leveraged buyout An acquisition paid for largely with borrowed money, secured on the target company itself. Quality of earnings An accountant's report on how much of a company's profit is real, recurring and likely to last.