The Portable MBA in Finance and Accounting, 3rd Edition

588 Making Key Strategic Decisions must be budgeted as they can have a significant impact on postmerger cash f lows. The detaile ...

Profitable Growth by Acquisition 589 differences are present. Because they are difficult to measure and to some ex- tent intangi ...

590 Making Key Strategic Decisions Only then will the bidder ’s shareholders see their wealth increase. This sounds simple, but ...

Profitable Growth by Acquisition 591 at the Daimler-Benz-Chrysler deal. Clearly shows the roles of culture, human nature, and ma ...

592 Making Key Strategic Decisions Adapted from Brian Coyle, Mergers and Acquisitions(Chicago: Glenlake, 2000), 32. J. Fred Wes ...

593 18 BUSINESS VALUATION Michael A. Crain It has been said that determining the value of an investment in a closely held busine ...

594 Making Key Strategic Decisions would be determined. Bob asked his certified public accountant (CPA) about valuing the busine ...

Business Valuation 595 buyers. Also, financial buyers often have an exit strategy to sell their in- vestment at some time in the ...

596 Making Key Strategic Decisions complete valuation is more than simply analyzing the historic financial state- ments of the b ...

Business Valuation 597 restaurant will probably not sell very many steaks if the price is double what the customer could buy at ...

598 Making Key Strategic Decisions She also finds that ACME’s customers are retail distributors of its prod- ucts and the compan ...

Business Valuation 599 Positive ACME has been in existence for 20 years. ACME has a long-term history of growing sales and profi ...

600 EXHIBIT 18.1 ACME Manufacturing Inc.: Summa ry of condensed balance sheets 1996 –2000. ($million) Growth R ates 2000 1999 19 ...

Business Valuation 601 million to $10.4 million. Debt consists of real estate mortgage notes, term loans, a revolving line of cr ...

602 EXHIBIT 18.2 ACME Manufacturing Inc.: Summa ry of condensed income statements 1996 –2000. ($million) Growth R ates 2000 1999 ...

Business Valuation 603 The profitability ratios ref lect the returns earned by ACME and assist in evaluating management performa ...

604 Making Key Strategic Decisions COMPARISON TO INDUSTRY AVERAGES Victoria also compares ACME’s key financial ratios to peer co ...

Business Valuation 605 intention to liquidate the assets. In addition, this approach does not clearly re- f lect the value of th ...

606 Making Key Strategic Decisions lower cash f low. Then a discount rate or capitalization rate (multiple) is ap- plied. The re ...

Business Valuation 607 maximize the shareholders’ returns by using a blend of debt financing (less ex- pensive) and equity capit ...