Category: Valuing A Business

Question: Is there a co-relationship between a business' asking price and how long it remains unsold? Answer: One would think that the seller would lower the price of a business that has been has been on the market for a…

Question: I am familiar with the concept of multiples of sellers' cash flows or owners' benefits as a means to determine value. My question is: How is the multiple determined? With the scarcity of verifiable information on business sales, how…

Question: What is the best way to determine the asking price of an independent motel business? The motel I am looking at has an asking price of $435,000 and annual revenue of $145,000. This motel is in a very small…

Question: I have a question about Owner Benefits when they "add back" certain expenses. Why does Interest and Depreciation become "cash flow to owner/Owner Benefit"? I understand why the owner's salary that's considered "excessive" and Net Income do but Depreciation…

Question: I am involved in a transaction and I'm having trouble valuing the inventory that is part of the deal. The seller says it's all good but is there really a way to measure this or should I take their…

Q: Here's my dilemma: I'm looking at a business that's been around for 18 months. There are three huge pending contracts that the seller says will come in over the next 12 months. They are factoring these into their asking…

Question: I've just begun to look for a business and I'm a bit confused. My search has been focused with online business for sale listings. Each website seems to have different terminology for the profit of the business. Answer: Great…