The reduction of sales has seen a coincidental reduction in operating expenses (OPEX), as reduced operations demand less cash.
It's human nature to wonder how you stack up against competitors. Are you as profitable? How does your profit as a percent of sales revenues affect your company’s value?
Most companies seek acquisition when they are on an upward trend, putting up numbers each month that are higher than the previous month.
For LBM companies that are now in the process of seeking acquisition—indeed for almost every company—the COVID-19 pandemic has suppressed sales revenues and resulting EBITDA.
For successful, growing companies, there is simply no need to allow an acquirer to pay you with your own money.
Here’s how to credit COVID-19 losses to earnings when selling your company.
In each and every deal we do, potential acquirers will want to know the revenues, sure, because that will show the orders of magnitude of the EBITDA.
I can't tell you how many company sellers wrongly calculate the dollar value of inventory when they are tallying up their company’s worth.
When there is a disagreement between an acquirer and a seller about the value of a company, yet determination to get the deal done, an earnout is often put in place.
You never know who your buyer will be, and it’s imperative that—short of accepting a market-clearing price—you take the offering of your company as far and wide as possible.