The net present value (NPV) is a measure used to determine the potential return in the value of an investment using the discounted cash flow method. It can also be interpreted as the difference in the present value of cash inflows and cash outflows in order to understand how much an investment will… View Full Term
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By: Exit Planning Institute
By: Yiannis Empeoglou
By: Allen Duck
By: Divestopedia Team
A working capital holdback specifically deals with the amount of working capital that must be delivered by the selling company at the closing date. Sophisticated buyers estimate the average level of working capital required by a company to service its expected annual revenue. The buyers…
A proprietary deal lets a specific buyer have a first chance to purchase a company before the company is presented to other buyers by the owner or an investment banker. Proprietary deals are often presented to specific buyers based on their perceived fit with the seller. While proprietary…
When people ask about the payback period their intended question is "When will I get my money back?" In order to answer this question, the payback period must deal with cash flows — e.g., invest € 100 today, receive € 20 in year 1, € 30 in year 2 and €…
Articles on succession planning may have prompted you to think about selling your own financial planning practice and wondering what price you would get. As both a business consultant and a former acquirer of financial planning practices, I can tell you that your practice is very likely…
Investment banks offer expertise and know-how that can add significant value to any transaction, but complicated fee structures can be daunting and confusing in picking an investment banker. In negotiating fee structures, a business owner should consider the goal he or she seeks to…
I talk to business owners pretty much every day and this is a question that comes up a fair amount. Partially because there's just not a lot of places for small business owners to go get this kind of advice on the topic of “How Can I Buy Out My Partner” and, obviously…
By: Paul Wormley | General Partner, Hadley Capital
There are plenty of articles answering the question: how long does it take to sell a business? The typical response is that it takes about 8 to 12 months to appropriately prepare, plan and execute the sale of a mid-market business. There are also lots of articles that cover “when is…
By: John Carvalho | President, Divestopedia Inc.
When working with an owner on their transaction, how does an M&A advisor ensure that the business is as valuable as possible at the point of transition? What steps…
M&A Advisors work on what is arguably the most significant financial transaction in a person’s life: the sale of their business. As a member of a business…
*Owner and company names have been changed to protect the privacy of the individuals and businesses represented in the case study.*When planning to exit your business,…
(Article originally posted here.)In the M&A world, there are few terms as dreaded as the “Re-Trade”. The continued market uncertainty, coupled with…
By: Michael Carter
It’s the dream of just about every private equity fund manager to source a proprietary deal. Why? Because they are often less trafficked by buyers and therefore…
Over the last few months I have talked to three different business owners who, in hopes of selling their businesses, reached out to a single potential buyer they…
The succession or exit by a business owner is usually the single largest financial transaction in their lifetime with a lot at risk as typically a majority of an…
By: Scott Yoder
Regardless of the current media concentration on the pros and cons of private equity firms and investments, those who work in the business or those considering…
By: Jack Kearney | Managing Director
Business buyers do not often reveal their hands about why they feel a business is an attractive acquisition prospect for fear of driving up the price. They do, however,…
By: Dave Kauppi
That dollar figure, whether written on a napkin over coffee or floated in a conversation, is not a binding offer. Any potential acquirer will need to conduct a due…
By: Paris Aden
One of the most important elements of a great investment is getting the right people involved. The right people bring innovative ideas, create opportunities and help the…
By: Jeffrey Kadlic
In my previous article, Value is in the Eye of the Beholder, I presented the idea that the definition of value can vary depending on the stakeholder. I stated that for…
By: Erick Hamdan
The exit plan is progressing. We have identified the goals under Step 1, determined the financial needs upon exit under Step 2, assessed the current value of the…
By: Jason Kwiatkowski
If you started your business from scratch, the chances are that you’ve invested a lot of your time and financial resources into growth. You have been through thick…
By: Lyle Solomon | Principal Attorney
I sat down with Tom Hendrickson, the founder and president of Mitre Media, an online financial media company focused on aggregating a sophisticated audience of…
By: Cory Janssen
Net Present Value
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Adam has been a lead advisor in the UK for M&A for over 10 years. His insights and advice come from a successful history of the due diligence…
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Alan Chettiar leads FirePower Capital’s Investment Banking team in all its engagements and sets its strategic direction. He brings over a…
Andrew J. Sherman is a Partner in the Corporate Department of Seyfarth Shaw LLP. Andrew focuses his practice on issues affecting business growth for…