Buyer Negotiations

An engagement with our firm to perform a business evaluation will provide you with a comprehensive explanation of your companies’ range of value on the open market. In most cases the information provided in your valuation is your own and is what we call “the attorney client number” not to be shared with anyone else. However in a select few cases portions a professional business evaluation may be used in negotiations with buyers who may need additional validating information. These portions may include.

I. Sanity Check – The Sanity Check contains post purchase details such as.
  • First years return on down payment
  • Months to repay down payment
  • Annual return on investment
  • Years to pay total purchase price
  • Price to Earnings
  • Price to Earnings (After Management Compensation)
  • Price to Revenue
  • Price to Assets
  • Internal Rate of Return
  • Does the price meet the Investment Hurdle Rate
  • Net Present Value
  • 3 Year Return on Investment

II. Post Sale Cash Flow – Examines, using some assumptions the buyers expected discretionary earnings projected over 10 years using a modest 2% real growth model. This allows a perspective buyer to view the real discretionary earnings after servicing debt and accounting for income tax liabilities.

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