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Valuations: Create more cash to improve value

Q. How do I assess and improve the financial health of my HME company in order to increase its value?

A. Being a financially sound and healthy company involves a lot more than simply turning a profit on paper. For-profit businesses shouldn’t simply strive for a positive net income.

Valuations: Look at five year projected cash flow

Q. How do I calculate a fair market value and reasonable purchase price for a contracted supplier?

 A. If you are purchasing the entire company, of which the bid contracts are part and parcel, then you will need to value both the existing business and the incremental cash flows the business will generate as a result of having won a bid contract(s).  

Valuations: Use cost approach

Q. How do I structure outside contract arrangements and determine the fair market value payments for those services?


Business operations: Get perspective on valuation


There’s often a wide gap between what an HME provider thinks his business is worth and what an investor will actually pay, according to Craig Hittle of Somerset CPAs.