Question

In: Accounting

bob has a prosperous financial service business that he no longer wants to run. In 300...

bob has a prosperous financial service business that he no longer wants to run. In 300 words of more, provide Bob with an exit strategy to sell the business. What items on the P&L. Cash Flow, & Balance sheet should he consider before exiting?

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Expert Solution

Ideally, an entrepreneur will develop an exit strategy in her initial business plan before actually going into business. The choice of exit plan can influence business development decisions. Common types of exit strategies include initial public offerings (IPO), strategic acquisitions and management buyouts (MBO). Which exit strategy an entrepreneur chooses depends on many factors, such as how much control or involvement (if any) he wants to retain in the business and whether he wants the company to continue to run in the same way or is willing to see it change going forward as long as he is paid a fair price for his ownership share. A strategic acquisition, for example, will relieve the founder of his or her ownership responsibilities, but will also mean giving up control.

As the business is not continuing then in p&L cash concept is to be followed. In balance sheet cost or net realisable value is to be recorded


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