Enterprise Value

This post will take a dive into the enterprise value concept – an important concept in private business valuations. As its name suggests, enterprise value is the measure of a company’s total value – it includes all asset claims and ownership interests from both, debt, and equity holders – thus, enabling an investor to compare […]

Business Assets

What are Business Assets? Business assets are the backbone of a business since they are the source of all benefits generated by the operation of the business. In this article you will learn the basics of business assets such as, what they are, several examples, what the difference is between the various types of assets, […]

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EBITDA

This post will take a dive into the concept of EBITDA – an important metric in private business valuation and analysis. The EBITDA stands for Earnings before Interest, Taxes Depreciation and Amortization. This metric can be seen as a proxy for cashflows from a company’s operations, and hence, used to analyze a company’s operating performance. […]

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Current Assets

What is meant by current assets? All those assets that a company or a business can easily convert into cash within a short period are known as current assets, typically this is within a 12 month period. They can be utilized to fund business operations and used to cover short-term liabilities. These assets continually fluctuate […]

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Quick Ratio

This post will take a dive into the concept of the quick ratio, its interpretation, and an example of the same. The quick ratio, commonly referred to as the acid-test ratio, measures the ability of a business to pay its short-term liabilities using only the current assets that are readily convertible into cash. These ‘quick’ […]

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Market Approach

What Is The Market Approach Valuation? The Market Approach valuation is one of the three approaches to value a business along with the cost approach and income approach. In simple words, the Market Approach determines the value of a business based on the price of transfer or the value of comparable businesses or even the […]

cost-approach

Cost Approach

The cost approach values a business based on the net assets (total assets minus total liabilities) a business holds. The approach uses the economic principle that a buyer will pay no more for an asset than the cost to obtain the asset of equal characteristics, can be referred to as the ‘cost to replace’. The […]

current-ratio

Current Ratio

The current ratio, commonly referred to as the current liquidity ratio or the working capital ratio, is one of the most important liquidity measures to assess a business’ performance. This post will take a dive into the concept of the current ratio, its interpretation, and an example of the same. The current ratio measures a […]

intagible-assets

Intangible Assets

Intangible Assets; Definition Intangible assets are those assets that are not stored or accumulated in physical form. Like all assets, intangible assets can be owned, transferred, or licensed, and have value. An intangible asset can be any intellectual property or brand. Trademarks, copyrights, and patents; are all classified as intangible assets. Intangible assets usually exist […]

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Cash Flow

Cash Flow Statement A cash flow statement is a financial statement that contains aggregated data and the value of all the cash Inflows and Outflows that a company receives from its current business operational activities, investing and financing activities. A detailed cash flow statement is crucial for investors, creditors, shareholders, vendors, regulators, taxing entities, and […]