Reviewing Financials

How Much Working Capital Should A New Business Owner Plan On Having?


Question:If you buy a business and you're getting a loan, how much capital should you have available until the business starts generating income? For example, if I have $100,000 sh

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What Is Cash Flow?


What exactly does the term "Cash Flow" mean?GREAT question!! Cash flow is probably the most frequently misused accounting term I can think of. Cash flow is NOT profit. First unders

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How Important Is Earnings Percentage?


Question:In determining the value of a business, how important is it to consider the earnings percentage - i.e. earnings as a percentage of overall revenue? All things equal, if I'

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Sales Taxes And Net Profit


Q: When you say that taxes can be added back to get a "net profit" number would that also include sales taxes for a retail business?A: You bring up an excellent point. When you add

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Dealing With "Cash" Business


Question:The seller tells me there's about $25,000 a year in cash business. How can I verify this? The seller is insisting it exists and he is factoring it into the price. I'd like

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