Forecasts – Reality vs. Fantasy

We generally request management forecasts to assist us in preparing a valuation of a business. The forecast helps us gain a better understanding of the expected trends of the business. For those businesses that are in start-up mode or going through some significant changes, we would ideally like to have a two or three year … Continue reading »

The Importance of Shareholders’ Agreements

If you are considering establishing, buying into, or bringing a new shareholder into, an incorporated business, we strongly suggest that you get a shareholders’ agreement at the outset of the relationship. Shareholders’ agreements, among other things, set out how key business decisions are to be made, define how the shares of the company are to … Continue reading »

What are Non-Operating Assets? How do they Affect Value?

From a business valuation perspective, non-operating assets (often referred to as “redundant” assets) are assets owned by a company, but not used in the day-to-day operations of the business. Common redundant assets include cash, marketable securities, loans receivable, unutilized equipment and vacant land. The identification of non-operating assets is an important step in the valuation … Continue reading »

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 »