DOES ANY ONE HAVE EXPERIENCE IN BUYING A COMPANY?
I have been approached from a couple of sellers, I need feedback from the community which is the criteria of buying a healthy company? I mean in terms of cash flow, revenue, total liabilities of the company, debt ratio.
Cheers.
Also, buying a company can’t be distilled into pure financials. Even if it could, you still have to adjust financials yourself to (1) represent true economic earning power rather than using what the broker/seller gives you and (2) include an estimate of future financials (doesn’t matter if the company made $1mm last year and it’s selling for $1mm today if, next year, profits go to zero).
I say this a lot, but check out the free Stanford Search Fund Primer or HBR’s Guide to Buying a Small Business. It will probably make any conversations you have with successful buyers more productive for you.