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 question! You're correct;
Cash Flow simply means the cash the business had at the beginning of a period, and what they had at the end, and what happened with the difference. The figure you'll want to determine is Sellers Discretionary Cash or Owner Benefits. This is the Pretax Profit of the business + Owner's Salary/Perks + Depreciation + Interest add backs. Pay special attention to Depreciation, For capital intensive businesses, you'll have to reduce this figure by any amounts you may need to purchase additional or replacement assets in the future.
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