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Customer Concentration

A crucial red flag when evaluating a new acquisition target is a lack of customer diversification. Companies that have customer concentration greater than 20% may pose a significant problem for a buyer.  The nature of the relationship between the company and…

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Debt Impacts Valuations

Valuing and financing a company is more complex than using a discounted cash flow model or market comparable EBITDA multiples. Unlike certain outliers (looking at you Tesla), debt compliance plays a major role in valuing a company. Fixed charge coverage…

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EBITDA is Not Cash Flow

The world has become obsessed with EBITDA.  Public companies, private companies, business owners, investment bankers, lenders, valuation firms, and the mainstream business media constantly reference EBITDA and use it as a business term to negotiate value, define agreements, and reference…

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Inventory Games

Over the past 25 years, Westshore’s principals have purchased many companies, but the transactions that are the most challenging tend to involve companies where the inventory was either under managed or reflected aggressive inventory tax strategies.  Many variables affect the…

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