Normalised working capital
The level of working capital normal for the business, cleared of the seasonal peak and of one-off swings.
How to read the number
This is what matters in a valuation: the gap between the actual and the normal level is a one-off inflow or outflow of cash, not a permanent feature of the business.
When the metric lies
The norm is computed from averages across the period rather than from the balance at the reporting date, which often falls on the least typical point of the year.
Also known as: normal level of working capital