Ron, as a Broker, you can see my historical comments to this thread. Unfortunately, it is the Brokers who should be demonstrating the Cash Flow, many times in cooperation with the Sellers' Accountants, not the Sellers. Many times, we present realistic Cash Flow, and the Seller comes back with unrealistic Price demands, in the face of the Cash Flow we represent. But that is a different problem. The Cash Flow itself should (in my humble opinion) rarely be a surprise to the Broker.
Obviously, we can be fooled by dishonest Sellers, although that is a rarity, in my experiences. The only time we are caught with routinely questionable numbers is with businesses that receive a lot of their Revenue in cash. If the Seller is not reporting the numbers, who knows what the real story is? And for that reason, we take a relatively small number of such listings.
But if a Broker is off by the numbers you suggest, that guy or gal is part of a scheme that is, at the very least, highly questionable. For the Broker to be off that much...well, there is really no excuse. He/she is either negligent, does not know what the hell he/she is doing, or is simply aiding in skewing numbers to almost a fraudulent level.
My guess, talking to many of the Brokers I do, literally across the Country, is that many of them simply have no idea what they are doing, on a day-to-day basis. They are simply unskilled, uneducated and unexperienced people, throwing spit against the wall to see what sticks, thinking this is an easy way to make a living. Thank God, most of them wash out relatively quickly; unfortunately, more take their place.
Being a responsible Business Broker is a tough way to make a living. But you gotta do it right, in order to make that claim!
So much for your comment that you hope some Brokers read this and take note. Your points are well taken.