Jan 09 Adjustable-Rate Mortgages: Balancing Risk and Reward
An adjustable-rate mortgage, usually referred to as an ARM, is a type of mortgage in which your interest rate can rise and fall. Because of this, your monthly payment can do the same. ...
Jun 12 You’ve Been Warned: 5 Tax Scams and What to Do Next
Over the past several weeks, we’ve broken down some of the most common scams individuals are facing—many with big tax consequences. These schemes aren’t just about lost dollars. They’re about shaken trust, stolen time, and emotional stress most folks never saw coming. Here’s what we covered: ...
Jun 10 Considerations in Buying a Business
I have helped many clients purchase businesses, and probably advised just as many to walk away from deals. What makes a deal good and what are the important factors in evaluating the purchase of a business? If you are considering purchasing a business,...
May 10 What is Risk? How Does it Affect Business Value?
If you're buying or selling a business, you need to understand the risks involved. Here's what you need to know about the impact of risk on business valuation....
Apr 26 How to Increase the Value of Your Business
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Reducing costs can help you increase cash flow and, as a result, the value of your business.[/caption]
The value of a business is based on two factors: the expected future cash flow of the business and the risk that future cash flow will occur when and in the amounts expected.
Cash flow and risk are the meat and potatoes of business valuation. The valuation report that is produced is just a detailed analysis of these factors.
Mar 07 Using Rules of Thumb in Valuing a Business
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Rules of thumb may be easier, but considering factors such as cash flow and risk lead to a more accurate business valuation.[/caption]
From time to time, I receive a call from someone who wants me to tell them the value of a business that they want to buy or sell. They provide a few items of information, such as last year’s sales or net income and expect that I will apply a multiple to quickly and easily come up with a value*.
What they are asking me to do is apply a rule of thumb.