Where you go to buy or sell a business…..

When analyzing a company for potential acquisition you may run into terms that are not familiar to you such as:  Net Income, EBIT, EBITDA and SDCF.  Having a thorough understanding of these terms and the relationship between them may be the difference between a good financial decision and a bad one. Net Income – Net [...]

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It has been brought to my attention that in my last post titled “Top 5” reasons for buying a business we looked at the advantages of buying a business strictly from an individual’s perspective.  So, today, let’s take a look at business acquisitions from the perspective of an acquiring company.         Unlike [...]

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When evaluating a company’s ability to repay debt, a bank typically evaluates the company’s debt-coverage ratio.  This ratio divides the company’s net cash flow from operations by the total debt payments (principle plus interest) to determine the number of times operating cash flow can service or repay the debt.  In equation form:  (Earnings before Interest, [...]

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Lenders typically look for multiple sources of repayment to satisfy any business loan.  These sources may range from the cash flow of the business, to the liquidation value of the fixed assets, additional sources of revenue to the buyer not attributable to the business and personal guarantees from the buyer and the buyer’s spouse.    [...]

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