Demystifying Valuation, Economic Damages + Forensic Accounting

Align business sales with favorable winds

Recently, I did a presentation with Jim Afinowich of IBG/Fox & Fin where the topic was ‘How to prepare your business to go to market’. Jim is a M&A transaction advisor here in the Valley and he gave advice that three things must be in alignment, or ready, before you sell, and I agree with …

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What is a Proof of Cash and why is it important?

One important tool used to confirm revenue in a financial due diligence is a proof of cash. A proof of cash compares cash deposits recorded in the target’s bank statements to the cash collections reported in the target’s financial statements. Don’t miss: Why do a sell-side financial due diligence In theory, these should equal each …

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Why do a sell-side financial due diligence

There are three main reasons sell-side financial due diligence projects (quality of earnings) are being done. Sellers want to present their Company in the best possible light to increase value. It gives confidence to the Buyer that someone other than the Company and M&A advisor has analyzed the financial data of the Company. Time kills …

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Elder fraud – A sad state of affairs

The FBI recently released the 2021 IC3 Elder Fraud Annual Report. Along with the Department of Justice Elder Fraud Initiative and the Internet Crime Complaint Center (IC3), the FBI is committed to identifying, investigating and prosecuting criminals who target seniors. I commend this effort having an elderly grandmother who was a victim of a fraud …

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COVID-19 and life expectancy. What we know so far.

2020…what a ride, am I right? But just how much of an impact did COVID-19 and the resulting pandemic have on average life expectancy? Even more, how does that impact economic damages? I’m going to skip straight to the punchline, and then we will get into the nitty-gritty: The CDC has reported that in 2020, …

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Do increases in federal funds rates affect the sale of my business?

In basic terms, the federal funds rate refers to the target rate that commercial banks borrow and lend their cash reserves overnight. The federal funds rate influences short-term treasury interest rates and indirectly affects everything from home and automobile loans to credit card rates. Don’t miss: Why perform financial due diligence? This month the Federal …

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Why perform financial due diligence?

In basic terms, a financial due diligence (FDD) is a process of gathering information concerning the target company, its source of revenue, the environment in which it operates, its sustainable cash flows, and risk profile. FDD is done to ensure that the prospective buyers and interested stakeholders are able to make an informed investment decision. …

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3 things to do before you sell your business

Many business owners are considering selling their business in the current economic cycle. Here are three things you must do before you sell your business. Don’t miss: Tax court rules on formula clause case Ensure the book income reported on your federal tax return agrees with the book income reported in your accounting system. This …

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Tax court rules on formula clause case

The United States Court of Appeals for the Fifth Circuit recently upheld the Tax Court’s ruling in the Nelson v. Commissioner case. On the surface this may appear to be a win for the IRS, and for the Nelsons it probably feels that way, but let’s dive a little deeper into the facts and circumstances. …

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Why personal consumption matters in determining damages

“It’s pretty simple, right? For personal consumption I just take the decedent’s annual wages, multiply it times the number of years he would have still been working, and that should be the damages, right?” We have all been on either side of phone calls just like this one, and I am confident in saying that …

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