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Business Valuation: Determining The Worth Of A Company

YoungUpstarts

Business valuation is defined as a way to determine the overall economic value of a company , and is a necessary component of a sound business plan and strategy. Any of these situations will demand a valuation to determine current and future projected value. . Also referred to as Book Value . Three Methods of Valuation.

Valuation 162
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What if your business runs out of money?   

Berkonomics

If fixed expenses, especially payroll, are paid out before cash is received from services or shipments, the company is financing its growth with ever-increasing working capital needs. Many great businesses in their growth periods find themselves stretched for cash.

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5 Financial Concepts Every Startup Founder Should Know

The Startup Magazine

Compared to Accounting, Finance is ruthlessly forward looking. Most financial valuation formulas value an asset by discounting the asset using the cost of capital (interest rate) to the present day. The basic lesson that founders can learn about asset valuation is that Accounting is past and Finance is future. Asset valuation.

Founder 144
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So, what if you run out of money?

Berkonomics

If fixed expenses, especially payroll, are paid out before cash is received from services or shipments, the company is financing its growth with ever-increasing working capital needs. Running out of cash denigrates the very value of a business, reducing greatly any bargaining power with suppliers or acquirers.

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Never run out of money.

Berkonomics

If fixed expenses, especially payroll, are paid out before cash is received from services or shipments, the company is financing its growth with ever-increasing working capital needs. Running out of cash denigrates the very value of a business, reducing greatly any bargaining power with suppliers or acquirers.

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How will a buyer value your business?  

Berkonomics

5 to 4 times gross revenues for similar businesses. Free Cash Flow Model: [Email readers, continue here…] This method is often used to value privately held companies with a range of five to eight times the cash available to spend after operating expenses are paid. Here they are, with short explanations of each: 1.