• While understanding the past performance of a business is an important
step to framing valuation expectations, buyers are ultimately paying for
the future cash flows of a business.
• Combining business judgment with sound market analysis to derive
reasonable financial projections is therefore critical to achieving maximum
value.
• In negotiating valuation, a seller should:
• present the strategic and financial merits of the proposed transaction
• convince the buyer of the future cash flow potential of the business
• quantify the resulting revenue and cost synergies