Using the Fair Market Valuation and the seller’s asking price as a starting point, there are seven critical factors that will influence the premium or discount to be applied in reaching a negotiated purchase price package. These seven factors include: The types of buyer. Financial parameters. The general attractiveness of the company. The relative negotiation [...]

Book Value is the difference between a company’s Assets and Liabilities as stated on the current Balance Sheet. Book Value is an accounting term and does not provide a meaningful measure of the business value. Liquidation Value is the net amount that would be realized if the business terminated and the assets are sold piecemeal. [...]

The August 2008 issue of Mergers & Acquisition magazine contains an interesting article entitled Refining Ebitda. The sub-title is: “Who knew Ebitda had so many definitions? As deal pros, lenders and companies fight it out in negotiations, the earnings yardstick often gets distorted.” So, the headline says EBITDA is a measure of earnings—simple enough. But [...]