EXPLANATION OF BUSINESS LISTINGS HEADINGS
What does it all mean?
What are the terms?
Is this in my best interest?
Contract negotiations are a difficult process to begin with. Especially if you’re not sure what you’re getting yourself into. We make sure that EVERYTHING is explained to your satisfaction. All details and descriptions.
Business Listing Headings
FULL PRICE – The full consideration being asked for the business by the seller. This includes cash, notes, assumable obligations, etc.
DOWN PAYMENT – The minimum amount of cash being asked for by the seller of the business. This is usually exclusive of any financial obligations of the Seller (if any) that are assumed by the Buyer.
ANNUAL GROSS SALES – The gross sales volume reported by the Seller for the most recently available 12 month period.
ADJUSTED ANNUAL PROFIT – “AAP” – This is a calculation showing the cash flow generated by the business during either the 12 months ending in December of 2022, or the most recent 12 month period, and adding back to the net profit shown on the Seller’s financial statements those expense items that are discretionary to the Seller. Typical “add backs” are the Seller’s compensation, including benefits, depreciation, non-recurring or unusual expenses, installment payments on furniture, fixtures and equipment that will be paid in full and transferred to the Buyer at closing and certain “non essential” business expenses. This is also known as Seller Discretionary Earnings (SDE).
Other Definitions
TOTAL ASSETS – The total value of all Furniture, Fixtures, Equipment & Vehicles that are included in the Purchase Price, and Goodwill, but excluding any real property.
INVENTORY – Total value of any Inventory that is included in the Purchase Price. The value of the Inventory is calculated as “Saleable Inventory at landed cost.”
REAL PROPERTY – Most businesses for sale do not include real property. If real property is available, it will be noted in the listing information.
SELLER CARRY BACK – The amount of the Purchase Price that the Seller is willing finance, if any, for a qualified Buyer.
NOTE: All Annual Gross Sales and Adjusted Annual Profit figures contained in this Web Site have been provided by the Sellers. Businesses For Sale In California will not verify the accuracy or completeness of the information provided.
