market-approach

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 simpler terms, the market approach determines the value of a business based on the price of transfer or the value of comparable businesses (or even the same business). This valuation […]

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, and can be referred to as the “cost to replace”. […]

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 and its interpretation, along with an example. The current ratio measures a business’ […]

intagible-assets

Intangible Assets

Intangible assets are those that are not stored or accumulated in physical form. Like all assets, intangible ones can be owned, transferred, or licensed, and they have value. An intangible asset can be any intellectual property or brand — trademarks, copyrights, and patents are all classified as such. Intangible assets usually exist in opposition to tangible […]

cash-flow

Cash Flow

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, investing, and financing activities. A detailed cash flow statement is crucial for investors, creditors, shareholders, vendors, regulators, taxing entities, and other interested […]

income-statement

Income Statement

For every business, it is important to record revenue and expenses in an organized manner. The arrangement of profit and loss information in the form of data is useful when making new strategies and work policies. A business with regularly updated, gathered income and expense details can run smoothly because the weak areas are visible, […]

asset-sales

Asset Sales

This post will take a dive into the concept of asset sales, an important concept in the domain of private business sales/transfers and their valuation. In an asset sale, a company sells some or all of its business assets to a buyer, but the company itself (as a legal entity) is not sold. Further, the buyer has the right […]

accounts-receivable

Accounts Receivable

Accounts receivable come into existence when a business offers products or services to its customers on credit. The amount of money that the customers owe to the company is written as an asset on the balance sheet. This asset represents the money that a customer has to pay to the company. For example, a water filtration company […]

non-current-assets

Non Current Assets

The assets that cannot be quickly converted into cash or cash equivalents to pay for debts or short-term liabilities are known as non-current assets. These assets are not liquid by nature (in other words, they take longer to sell and realize their value into cash) and include long-term investments that cannot be used as a […]

key-client-risk

Key Client Risk

Key clients are great, right? But are they risky? And how might they be affecting your business’ value?   Let’s address the importance of achieving a well-diversified client base to increase your business’ value, and how the reliance on key clients can impact the risk perceived by investors in your business, which can in turn […]