Income Statement (Pre-Acquisition)
See Inputs for general instructions.
The Income Statement section allows the user to enter sales and profit data for the year prior to the acquisition. BVX refers the prior year as Year-0.
If proper EBITDA is entered in EBITDA, no additional entries are required in the Income Statement. However, often there is a need to make additional adjustments to the EBITDA for certain expenses. For this reason BVX allows two additional inputs in the Income Statement section. These additional inputs are explained inLess Additional Salaries/Expenses and Less Rent if not deducted.
For certain scenarios:
- Historical Financials: BVX determines business value based on the future performance of the business, not on its past performance. Hence, BVX does not have inputs for historical financials. Prior history of the business should be analyzed outside of BVX. Past performance is relevant to the extent it helps project the future performance; however, value of a business depends solely on its future performance.
- Income Statement Details: BVX does not require income statement details. The only component of the income statement that affects valuation in BVX is EBITDA. Accounting and re-casting details that lead to EBITDA are done outside of BVX.
- Start-ups and Turnarounds: These situations often have negative profits in Year-0. BVX does not allow negative profits in Year-0. However, BVX is capable of handing start-ups and turnarounds. See Start-ups and Turnarounds.