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How to Determine Fair Price and Cash Flow in Business Investing
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The first thing investors look for is whether they are paying a fair price.
It's important to note that EBITDA and seller discretionary earnings are not the same as cash.
There are various factors impacting the balance sheet that EBITDA does not account for, the most obvious being capital expenses.
Additionally, changes in working capital and other timing elements of the business can affect it.
Therefore, investors also consider the free cash flow of the business.
Watch the full episode:
#ERP #FPnA #WBSRocks
It's important to note that EBITDA and seller discretionary earnings are not the same as cash.
There are various factors impacting the balance sheet that EBITDA does not account for, the most obvious being capital expenses.
Additionally, changes in working capital and other timing elements of the business can affect it.
Therefore, investors also consider the free cash flow of the business.
Watch the full episode:
#ERP #FPnA #WBSRocks