The Question: Charlie and Maribelle Brown have owned and operated a retail furnishings store for greater than 20 years. They have employed an impartial CPA during this time to arrange varied sales tax, payroll tax, and revenue tax returns, in addition to financial statements for themselves and the bank from which they have borrowed cash once in a while.
They are considering selling the store but are uncertain about tips on how to set up an asking price. Prepare a short written answer (no greater than a few paragraphs) about what type of knowledge is more probably to be included in the material ready by the CPA which will assist the Browns establish an asking price for the store.
Reviewing the past and current monetary statements prepared by their CPA, would permit the Browns to trend historical knowledge such as money circulate and price of operations. This, coupled with the current and projected financial local weather in addition to present and projected price of living, would assist the Browns to grasp how a lot they spend to maintain their enterprise running in addition to how a lot they’ve profited over time.
Although the information offered in the monetary statements isn’t a concrete indicator, it’s a good gauge of how the Browns’ business will perform in the future. Unless main economic adjustments or different unexpected circumstances happen, historical performance usually tends to stay constant. The Browns would be ready to use most of the information offered by their CPA to discover out a fair asking worth for his or her retail furnishings retailer.