What Are You Doing to Grow Your Top Line?
Baseball season is in full swing, so it's a good time to remember how great hitters get to the Hall of Fame. I t's the same process you should use…
Get More At Bats
A good hitter knows he has to get more hits to be great. A great hitter knows she has to get more at bats to get to the Hall of Fame. W hat are the key metrics that will help you drive…
What do Magicians, Grifters and Financial Legerdemain Have in Common?
Magicians are pretty amazing, aren’t they? They do stuff right in front of our eyes … we’re on the edge of our seats … expecting the unexpected … and even…
Business Finance | Pick a card … any card ….
New metrics to Define Financial Performance?
In the tumult surrounding the 3D maelstrom (Debt Ceiling, Downgrading and Deficit) of several weeks ago, you may have missed another chilling corporate finance update on the relentless pursuit of performance metrics that extol the sunshine while you’re in the heart of darkness. Yes, there may be some economic value for certain of these metrics, but they’re dangerous barometers of realizable value and highly misleading as to future achievements of tangible operating profits and free cash flow.
Another Sign of the Apocalypse?
Most of us recall the “eyeball counting” that preceded the Dot-Com-Bomb and those certain “Signs of the Apocalypse”, as when your cab driver is telling you what stocks you should buy. (more…)
The Big River series is a 12 part installment about a company desperately seeking cash to fuel their growth and the struggles they face trying to find it.
Business Finance | Valuation | What kind of investor do I need?
A Weekly Business Finance series for Non-Finance Executives!
“Financial Adrenaline” is a term we love around here because it reflects our commitment to help you turbocharge your business with practical tips and techniques to improve free cash flow, the lifeblood of business. As a further extension of our Financial Adrenaline program, we’re going to share a new Business Finance Tip every Wednesday specifically for those business executives who don’t have a finance background. Our current Big River series started with We’re Making Money. Why are we broke? … then No Cash? Can we borrow what we need?, What if our loan collateral doesn’t cut it? and the need for outside investors.
Last week, we began our conversation about business valuation. We continue that discussion today with a valuable chart that will help you understand some of the key valuation principles.
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“Can anybody remember when the times were not hard and money not scarce?”
~ Ralph Waldo Emerson
What’s the difference between a Strategic & Financial Buyer
John Wilson, CEO of Ace Business Stuff, has been working diligently with his controller, Tom Sampson, to assess his financing needs. They may require an equity investor as he suspects that his controller’s right that bank financing may be insufficient.
“Hi Lary,” John said when he got Lary Blogger on the phone again.
“We’re almost finished with our forecast, but it still looks like we’ll need some equity. I’d like to explore what you said about strategic buyers and financial buyers and see the diagram you mentioned.”
Different Buyers have Different Perspectives
“John, this diagram is only meant as a general overview of some key valuation concepts,” I said when I visited with John at his office a few days later. “It should help you better understand certain key concepts which underlie the valuation of an ownership interest in your company.
The Strategic Buyer will pay the highest premium
“At the top is the Strategic Buyer. In short, he’s looking for more than a simple financial return. (more…)
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