As a result of Covid-19, many businesses are entertaining the sale of their company or considering the purchase of another business which may be on the market. Determination of market value involves gathering and analyzing a good deal of financial information. One method used is the calculation of a business’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) times a multiple based upon industry or interest rates.
There are numerous additional items which also must be taken into consideration. It is very important, that the business’s books are current and disbursements and revenue are classified in the proper account in company ledgers in order for calculations to be accurate. It is also equally important to confirm that revenue has been recognized properly based upon the current accounting pronouncements. Projections should be prepared to reflect what is expected for the next few years; this can also help to increase the market value of a business. Businesses will also need to document what their product lines or services lines deliver so that a potential buyer is aware of what they are buying.
All of these requirements can generally be met by the business’s CFO, but what if the business doesn’t have a person at this level person on their team? Prager Metis’ CFO Advisory Services team can fill the void as an interim virtual CFO. We provide all these services and more and are available to businesses seeking a CFO who can assist management in running their business from a financial prospective.
For more information on our CFO Advisory Services Team and the services we provide, please visit Click here
