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Tag: valuations


Smart Talk

Valuations: Create more cash to improve value

October 25, 2013Craig Hittle

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. They should strive for positive cash flow and a strong balance sheet in order to  maximize the value of their business. Profit on the income statement is relatively meaningless if, at the end of the accounting period, the business has less cash in the bank than it did at the beginning. It is therefore critical to...

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Smart Talk

Valuations: Look at five year projected cash flow

August 23, 2013Craig Hittle

 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).  In most cases, the appropriate way to determine the potential net present value (i.e. the purchase price you may be willing to pay today for the rights to future benefits) is to look at a five-year net cash flow projection (and terminal/long...

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Smart Talk

Valuations: Use cost approach

August 23, 2013Craig Hittle

A. Many HME companies that provide PAP products and supplies are looking for ways to expand their customer base and catchment area without having to invest directly in new facilities, locations and staffing.  For example, some HME companies contract with sleep centers to use their employees for PAP patient education and equipment set-up. Qualified specialists from the HME company train the sleep centers/contractors and consistently follow up to continue training. The HME company provides PAP...

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Medtrade Spring

Business operations: Get perspective on valuation

February 26, 2013Jennifer Keirn

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. At Medtrade Spring, Hittle will offer some perspective on what your company might be worth, and how to strengthen it for maximum valuation. HME News: What are the factors most impacting valuations right now?Craig Hittle: In this particular industry, valuations are built on future cash flows of the business. In the current environment,...

HOme medical equipment, Medtrade Spring 2013, valuations


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