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Buying Or Selling A Business in 2023
The financial world is changing for the first time since 2009. It seems, for the near future, that the era of cheap money is over and asset prices will now reflect a higher cost of money as the Federal Reserve along with other central banks raise rates to fight inflation. While 4-5% Fed rates may …
What Is Seller’s Discretionary Earnings (SDE) and How To Calculate It
Definition of Seller’s Discretionary Earnings Seller’s Discretionary Earnings, or SDE, is a type of annual cash flow used to benchmark a privately owned small business profitability based on a single full-time owner operator. The net income is reconstructed to account for “discretionary expenses” which are typically owner benefits. The purpose of this financial reconstruction, or …
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List Of Terminologies Frequently Used In Business Sale and Acquisition Transactions
Amortization A non cash expense item in the income statement for intangible assets. It is similar to depreciation which is used for tangible assets. It’s purpose is to match the capital asset’s expenses with the revenue it generates. Used in accrual accounting to match revenues. Depreciation Depreciation is the expense item in the income statement …
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How To Prepare Your Business For Sale
You could put up your business for sale tomorrow but you probably will not get top dollar for it. The same principal applies for any asset that you want to sell whether it is a house or car. By preparing your business for sale, you ensure that all the nuances are resolved to ensure a …