when evaluating the assets of an existing business, the inventory ________. course hero

What is the most meaningful method of determining the value of an existing business's inventory?

Business valuation is partly art and partly science. The most meaningful method of determining the value of an existing business's inventory is its book value. A principal advantage of buying an existing business is the purchaser's ability to rely on the previous owner's experience.

When buying a business, can an entrepreneur usually purchase equipment and fixtures at prices well below their book value?

When buying a business, an entrepreneur can usually purchase equipment and fixtures at prices well below their book value.

Why is the balance sheet technique used?

The balance sheet technique is one of the most commonly used methods of evaluating an existing business, although it oversimplifies the valuation process because it values a company only on the basis of its net worth.

How to value an existing business?

The discounted future earnings approach to valuing an existing business involves estimating the company's net income for several years into the future and then discounting those future earnings back to their present value.

What is goodwill business?

Goodwill is the difference between an established successful business and one that has yet to prove itself. True. When evaluating a business as a potential candidate for purchase, an entrepreneur should determine the real reason the current owner wants to sell.

What is a creditor's claim against an asset called?

A creditor's claim against an asset is referred to as lien.

What is an entrepreneur who is considering purchasing a business?

An entrepreneur who is considering purchasing a business is analyzing a company's accounts receivable. The following table summarizes her findings.