I am buying a freight broker. How do I evaluate working capital

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by a searcher from University of Minnesota - Twin Cities Campus
in Overland Park, KS, USA

5yrs ago

I am buying a freight broker. How do I evaluate working capital

2 Likes

211 Views

reply by a searcher 5yrs ago
from University of California, Santa Barbara in Los Angeles, CA, USA

I think Tyler has a good answer here. We just exited a freight brokerage and we’re able to add almost $1mm to the investor return by managing WC on the way in and playing it well on the way out so your attentiveness to this area is important

reply by a searcher 5yrs ago
from University of the Pacific in Ripon, CA 95366, USA

Cash to cash cycle time is the lifeblood of the transportation industry. Net 30 days is the industry standard from receiving carrier invoice. This time allows you cash float and use sweep accounts before paying carriers. You can negotiate with you shippers to be paid faster for .5-1% deduction on gross profit. Make sure you have non-solicitation, non-competes and confidentially agreements in place with every agent/employee. 3PL is very much a personal relationship based industry. Low cost leader is generally the winner.