Business Valuation, Receiving Offers
What is Cash Free Debt Free?
read a transcriptIn this video | Neil Ackroyd |
More Videos from this Series
Episode 1: What is EBIT?
Uploaded: Monday 2nd July 2012
Episode 2: What Assets Should be Included with My Business when Selling?
Uploaded: Monday 2nd July 2012
Episode 3: Cash Free Debt Free Basis
Uploaded: Monday 2nd July 2012
Episode 4: What is a Normalised Level of Working Capital?
Uploaded: Monday 2nd July 2012
Episode 5: What does the Working Capital Cycle mean to Assets of the Business when it comes to Selling?
Uploaded: Monday 2nd July 2012
Episode 6: Winning the Negotiation on Normalised Level of Working Capital
Uploaded: Monday 2nd July 2012
Episode 7: Typical Process When Selling a Business
Uploaded: Monday 2nd July 2012
Episode 8: How do You Value a Business?
Uploaded: Monday 2nd July 2012
Episode 9: How do You Value a Business | Venture Capitalists
Uploaded: Monday 2nd July 2012
Episode 10: How do I Value a Business? | Maximising Business Value
Uploaded: Monday 2nd July 2012
Transcript of video "Cash Free Debt Free Basis "
Neil Ackroyd
So what is cash free debt free basis? Well cash free debt free is 50% as simple as it sounds, so it generally is, debt free. So any debt that you’ve got in the business if you example we were just using in the last video of the business selling for £20 million, then if it’s got £2 million worth of debt then you get your £20 million and you use some of the that £20 million to repay the debit, or, the purchaser would give you £18 million and keep the debt. But either way you’re valuing it as though its debt free. Now the cash free aspect of it is slightly more complicated because you’re valuing it as though it’s cash free debt free basis , but free of free cash. So cash that’s not needed to run the business or cash that’s outside what we call a normalised level of working capital.What is Cash Free Debt Free? Selling a business. Neil Ackroyd explains the facts about cash free debt free basis and how this effect the sale of a business.
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