Posts by: Randolph B
Asset Acquisition: Customer Relationship
Our company is currently acquiring assets of a target company. We intend to acquire specifically, (1) PPE's and (2) customer database. For PPE, we hired a third-party service provider to appraise. For the latter, I used discounted cash flow method, valuation is for 10 years. However, my initial mode... Read More
Our company is currently acquiring assets of a target company. We intend to acquire specifically, (1) PPE's and (2) customer database. For PPE, we hired a third-party service provider to appraise. For the latter, I used discounted cash flow method, valuation is for 10 years. However, my initial mode... Read More
First, thanks for the very quick response. You truly are a valuable resource. Follow up question: Yes, EBIT is already negative. What do you mean by "normal EBIT margin"? What we did was estimate all the expense items by cost accounting using the historical costs. To be more specific, the fixed cost... First, thanks for the very quick response. You truly are a valuable resource. Follow up question: Yes, EBIT is already negative. What do you mean by "normal EBIT margin"? What we did was estimate all the expense items by cost accounting using the historical costs. To be more specific, the fixed costs are too high and the sales from the existing customer list is not enough to cover for the fixed cost that is why it is being negative.
Why should it be pretax and not after tax NPV?
apply growth rate and retention rate to base revenue for projected revenue - is this growth rate minus the retention rate?
Thanks very much!
How do we calculate the expenses of contributory assets?
We used 10 years because we realized that the barrier for entry is low, more competition, thus assigning a longer valuation period might be generate more uncertain cash flows. Read More