Recently, I did a presentation with Jim Afinowich of IBG/Fox & Fin where the topic was ‘How to prepare your business to go to market’. Jim is a M&A transaction advisor here in the Valley and he gave advice that three things must be in alignment, or ready, before you sell, and I agree with … Keep Reading The post Align business sales with favorable winds appeared first on Henry+Horne ..read more

One important tool used to confirm revenue in a financial due diligence is a proof of cash. A proof of cash compares cash deposits recorded in the target’s bank statements to the cash collections reported in the target’s financial statements. Don’t miss: Why do a sell-side financial due diligence In theory, these should equal each … Keep Reading The post What is a Proof of Cash and why is it important? appeared first on Henry+Horne ..read more

There are three main reasons sell-side financial due diligence projects (quality of earnings) are being done. Sellers want to present their Company in the best possible light to increase value. It gives confidence to the Buyer that someone other than the Company and M&A advisor has analyzed the financial data of the Company. Time kills … Keep Reading The post Why do a sell-side financial due diligence appeared first on Henry+Horne ..read more

In basic terms, a financial due diligence (FDD) is a process of gathering information concerning the target company, its source of revenue, the environment in which it operates, its sustainable cash flows, and risk profile. FDD is done to ensure that the prospective buyers and interested stakeholders are able to make an informed investment decision. … Keep Reading The post Why perform financial due diligence? appeared first on Henry+Horne ..read more

Many business owners are considering selling their business in the current economic cycle. Here are three things you must do before you sell your business. Don’t miss: Tax court rules on formula clause case Ensure the book income reported on your federal tax return agrees with the book income reported in your accounting system. This … Keep Reading The post 3 things to do before you sell your business appeared first on Henry+Horne ..read more

Blue sky, what is it? And how do I know if my company has any? First, let’s define blue sky. Blue sky, or goodwill, is the excess purchase price over the market value of the tangible assets recorded on the balance sheet. For example, if a company has $500,000 of current assets and $500,000 of … Keep Reading The post Blue sky – does my company have any? appeared first on Henry+Horne ..read more

In most mergers and acquisition transactions, the asset purchase agreement states that the seller is required to deliver to the buyer an agreed-upon amount of working capital (excluding cash in most cases). This is known as the Target Working Capital and for the purposes of this post, let us assume $1 million is the Target … Keep Reading The post What is a working capital true-up calculation? appeared first on Henry+Horne ..read more

One of the biggest challenges facing an expert when assessing damages in matters involving children is the future lost wages portion of a calculation. Estimating future earnings, probable educational attainment, and evaluating worklife expectancy are only some of the considerations that make these cases difficult and when the incident happens at such a young age, … Keep Reading The post Estimating future earnings of a child or minor appeared first on Henry+Horne ..read more

Should a sell side due diligence be an exercise where the consultant provides a financial due diligence report that presents the sellers business in its best light at the expense of overlooked problem areas, or should the consultant perform rigorous procedures to uncover potentially problematic issues that could disrupt the sales process if the buyer … Keep Reading The post Sell-side due diligence: Cheerleader or value service? appeared first on Henry+Horne ..read more

Can you, and should you, apply a discount for lack of control when valuing a majority interest? Well, with almost everything valuation related, it depends. A recent tax court case (Estate of Warne v. Commissioner) allowed a small discount for lack of control discount for majority interests in several Limited Liability Companies (LLCs). Don’t miss: … Keep Reading The post Discount for lack of control and majority interests appeared first on Henry+Horne ..read more