If i pay £18,000 for goodwill which generates £4,500 pre tax profits per annum - does this look like a good deal?
Brian
Replies (4)
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.....good grief.....
.....Brian, what an extraordinary question.
If you wish to give some meaningful information about what you have acquired, then someone may be able to comment in a meaningful way.
Please seek some proper advice from a sensible adviser ( do NOT assume accountants will all necessarily be sensible advisers re purchase or sale of a business - many are, many are not)
WOW
25% return? Guaranteed? Interest costs in purchasing the goodwill? If it's a risky return probably overpriced, if not, it's probably cheap. Sounds OK based on brief information supplied.
As Ever - It All Depends........
The answer depends on a number of factors - including how hard you have to work to make the return. But also including:
Risk
Cash flows
Dependence on others
Reliability of those others (if any)
Longevity of the business/project
etc. etc. etc.
This question really is pretty meaningless without alot more info.
I suggest that you carry out a SWOT analysis, and a PEST/SLEPT analysis to get a feel for some of the factors you would need to consider.