One of the routine evaluations of business owner’s (and their consultants) relative to value to sell is cash flow. In fact it is a heart of the matter.  Often the simple cash flow example is stated this way:

Cash flow to a single owner is

  • Bottom line of the tax return or related profit and loss statement Plus
  • Non-cash items Plus
  • Owner’s wage Plus
  • Other personal items not required in the business (think owner health insurance or private car) Plus
  • Excess wages paid to a family member Equals

Cash Flow

This article explains some nuances that could alter the formula  Click Here

Do you have questions about cash flow?  Ask