Question

Is it possible to make a company "look good, financially" to generate high valuations when you want to sell a business? What would you do? How would you recognize this tactic in a business you were interested in buying?

Answer 1

Looking good financially could possibly be one of the reasons for buying a business but not the only reason the person who buys the business look for several other factors also

Because buying the business is less risky then starting from scratch when you buy a business you take over an operation that only generating cash flows and some amount of profit how it is easy to get financing to buy existing business that because buying business is less crispy then starting from scratch menu buy a business you take over the location that's only generating cashews and some amount of profit ahead it is easy to get financing to buy a business then to start a new one

Buying company certainly can have its merits here of you established customer base systems and processes established employees less risky when starting from scratch

When we buy a company will look at its financials marketing strategies incorporation contracts in legal documents sales record list of liabilities definition of the business all accounts receivable and payable however its me not be necessary that the companies only in curing profits and wants to sell it self ride in a company in Karim profit want to sell itself the other reasons would be the disinvestment people would wish to buy the company because of its reputation because the brand that it holds because it gives amazing market strategies because amount of customer it has that's why a merger and acquisition happens first Synergy the most used word is synergy which is the idea by combining business activity performance will increase and cost will decrease. Defecation these two conflicting goals have been used to describe the transactions a company that merges to diversify may acquire another company in a seemingly unrelated industry in order to reduce the impact of particular Industries performance on its profitability companies seeking to shop in focus of an merge with companies that have deep market entrance

Increase supply chain price in power bi buying out one of its suppliers or one of its distributor of business can eliminate a level of cost If a company buys out one of its apply it is able to save on the margins a supply was previously adding two is caused it is known as vertical Merger.

Minute competition the choir tournament the future competition and gain a larger market share in the products market the downside of this is that the large premium is usually required to convince the target company shareholders to accept the offer