RABCPA PC Blog
What is a midyear convention? In finance when we discount cash flows we assume that all the money is received at the end of the year, and discount it back. Obviously, this has some questionable assumptions, mainly that all the money would be received at December 31st. In order to make the projections more realistic many times we will adopt a midyear convention. This assumes that we receive the cash flow evenly throughout the year. While this is not perfect it is more accurate than what is typically done in most cash flow calculations.
Posted September 28, 2018 by Robert A Bonavito in Business Damages
New Jersey cannabis industry relies on the expertise of Robert A. Bonavito NJ forensic accountant for services.
Posted September 26, 2018 by Robert A Bonavito in Litigation Services
Many people do not realize that equity value is different from enterprise value. Equity value is mainly multiplying the number of shares outstanding by the value per share. Enterprise value is what the total enterprise is worth. In order to get that you have to add in the long-term debt plus the equity value and subtract out any cash. The reason for this is that if you were to buy a company you have to pay the debt holders and you have to pay the shareholders too. You also get the cash on the balance sheet. Posted September 21, 2018 by Robert A Bonavito in Business Valuations
