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Casting or Recasting—What’s the Difference?

June 6, 2011

Definitions of Casting.  1. The art of throwing a fishing line out over the water by means of a rod and reel. 2. The act or process of choosing actors.

Operating your own business may seem frightfully similar to either one of the above definitions!  However, when it comes to valuing your business for sale purposes, there is a type of casting that is crucial. Recasting.

What “recasting” the financial statements does is:

  • Provide a clear indication of the business value to help the owner form accurate expectations
  • Allow for owner benefits such as salary, perks, and discretionary expenses to be added back into the value of the business so a future buyer can accurately assess its cash flow and future earning capacity.
  • Enable buyers to make meaningful comparisons with other investment opportunities.

Recasting is one of many services provided by BC Business Brokers. We assist business owners in understanding financial statements so they can move forward with the completion of the business sale. We also bring qualified buyers to the table and assist them in finding the right business for their background, lifestyle and financial goals.  Because selling a business is pivotal on its asking price, the consultants at BC Business Brokers are trained to perform an analysis of financial statements to calculate a range for the “Most Probable Selling Price” (MPSP) of the business.  This range is what the current market will typically support.

BC Business Brokers provides outstanding resources, expertise and people who are dedicated to the success of its clients. And if you’re lucky, your business broker may even take you fishing… with a rod and reel that is! You are welcome to visit our local website www.bcbusinessbroker.ca, or the international website www.sunbeltnetwork.com/vancouverisland. Feel free to contact us direct at 250-751-7917 or 1-877-289-0969 to learn more about what our business specialists can do for you.

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