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is there a way to determine a seller earnings based of cash flow? 1million in cash flow or 500k in cash flow

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Answers (2)
Buy-a- Company

Yeah, check the signed tax returns. The tax returns clearly list taxes, interest, depreciation, and amortization. Add those back in. Then, verify any miscellaneous add-ins or deductions that they used to figure their cash flow. Part of due diligence also should allow you to see the seller's bank statements.

Mar 26, 2010
Julie A. Barnes, CPA
Small Business Exchange, Inc.
Travis County, TX

Hello Bruce,

What documentation provides evidence for the cash flow?

Thanks
Julie A. Barnes, CPA
President, SBX, Inc.

Mar 25, 2010

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