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M&A Blog #16 – valuation (Discounted Cash Flow)

Francine Way

As I mentioned in my last post, Discounted Cash Flow (DCF) is a valuation method that uses free cash flow projections, a discount rate, and a growth rate to find the present value estimate of a potential investment. Remember the cardinal rule in accounting: balance sheet must balance.

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Methods and Examples on How to Value a Company

Lake Country Advisors

It’s integral to ensuring that the sale benefits all stakeholders and should be one of your priorities before advertising it to potential buyers. It’s a delicate balancing act, as inaccurate valuations have polarizing consequences. However, company valuation isn’t as simple as slapping a price on your business.

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Why Accurate Financials are Key to Success in Buying, Selling, and Valuing Businesses

How2Exit

E247: Why Accurate Financials are Key to Success in Buying, Selling, and Valuing Businesses - Watch Here About the Guest(s): Ryan Hutchins is an accomplished entrepreneur and expert in the field of mergers and acquisitions. Hutchins emphasizes, "You live or die by the cash in your bank account, which is not a great way to run a business."

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The Verdict is In on the Sell Side: Business Valuation Basics

Successful Acquisitions

It’s a balance where numbers meet intuition, and neither aspect should be ignored. Purposes of Valuation Before diving into the nuts and bolts of valuation, it’s crucial to understand its purposes. It involves adjusting for non-recurring items, operating assets or liabilities, and accounting conversions.

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How to value a company that operates in a highly volatile industry with unpredictable revenue

Wizenius

Valuing a company that operates in a highly volatile industry with unpredictable revenue streams and market conditions requires a thoughtful approach that takes into account the unique characteristics and risks associated with the industry. Use different discount rate scenarios to account for varying levels of risk and uncertainty.

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Useful Software Industry Acronyms for Executives

Software Equity Group

Being aware of these terms and their implications can significantly enhance your ability to navigate negotiations, make informed business decisions, and demonstrate a comprehensive understanding of your company’s value. The cash accounting or the accrual method is used to prepare P&L statements.

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Should I Sell My Insurance Agency?

Sica Fletcher

Examples might include: Tax documentation Income statements Balance sheets Cash flow statements Because you want to get an idea of whether or not your agency is profitable, it’s best to compile at least 3-5 years’ worth of these documents to get a picture of your profits – whether they are sustained over time or show significant ups and downs.