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American business terms. Help.

  • 03-07-2010 1:31pm
    #1
    DubTony
    Registered Users, Registered Users 2 Posts: 3,267 ✭✭✭


    When identifying business opportunities here, I've always gone with the standard model of Turnover * percentage profit margin less expenses to give a Nett Profit figure, but the Yanks seem to do it differently.

    Has anyone any knowledge of what the term CASH FLOW means in American Business For Sale listings?

    I've tried to identify it, but have just gotten confused. One explanation stated that it is revenue (turnover) less costs + "what the owner takes"; while another seems to identify it as simply the Nett Profit. But then another site will list different figures for Nett Profit and Cash Flow, while showing an "Owner Benefit" figure that seems to have no relation to any other. I'm confused.

    Another thing that is presented on some Business For Sale sites, but not on others, is the amount of Debt that the business for sale holds. While I had a feeling that the purchase of a business over there can sometime mean taking on whatever debt the company has, and therefore (I assume) the seller advertises a smaller Asking Price, is this standard practice?

    Any help appreciated. Thanks.


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