Do Your Own Business Valuation � Part 5: Adjusting Net Income
The earning capacity of a company is the primary driver of its value. Cash flow is the preferred measure of earning capacity for valuation purposes because it represents a purer form of earnings. Calculating cash flow begins with the net income or loss of a company then adjusting it for a number of items to achieve a figure that accurately portrays the true earning capacity of the company. Depreciation & Amortization Depreciation involves writing off or expensing the cost of tangible a
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Tags: Business, Cash flow, Technology