What is EBIDTA? Why is it so Important?

EBITDA is an abbreviation that stands for earnings before interest, taxes, depreciation and amortization. EBITDA is an approximate measure of the cash flow available to the owner of a business prior to capital expenditures, working capital and debt-servicing requirements and income taxes. Other measures of earnings include: net earnings, net earnings before income taxes, EBIT … Continue reading »

What Information Will I Need to Have My Business Valued?

In order to prepare a valuation of your business, we will need to review the financial position, recent financial results and the key operating characteristics of your business. In preparing our valuation report, we will typically require the following information: 3 to 5 years of historical financial statements and a current budget or forecast, if … Continue reading »

Does the Low-Risk Tax Valuation Still Exist?

In the spectrum of business valuations, traditional thought has held that valuations prepared for tax purposes are the lowest risk valuations. The tax practitioner need only ensure that the file is adequately ‘papered’ and that a price adjustment clause is included in the transfer agreement. However, in our practice we have seen an increasing number … Continue reading »

How Can You Value a Business When it is Going Through Major Changes?

Although one of the first things we ask for when preparing a business valuation is the company’s previous five years of financial statements, this isn’t the only information we rely on. The concept of business valuation is forward-looking. For stable businesses, past earnings are generally indicative of expectations for future earnings. However, in situations where … Continue reading »