Exam 6: Taking Over an Existing Business

List and describe two advantages and two disadvantages of buying an existing business.

Compare and contrast tangible assets and intangible assets.

When purchasing a business, the people working there can be disregarded since they will probably not stick around after the business is in new hands.

Asking the owner of a business where you have been a regular customer whether the business is for sale may be one source of finding a potential new business.

List at least three guidelines that should be followed in a family business.

The intangible asset that allows a business to earn a higher return than a comparable business might generate with the same tangible assets is known as ______.

Existing businesses do not have to be scrutinized carefully to determine whether they are a worthwhile investment of time and money.

A list of liabilities of an existing business would include ______.

Having an established supplier relationship is an advantage of buying an existing business.

When analyzing the financial statements of the business, it is important to rely most heavily on the most recent year of operation.

A key factor in business valuation is review of what other companies in the industry have sold for.

Assets that have value to a business but are not visible are known as ______.

Inventory, equipment, and building are examples of what kinds of assets?

A disadvantage to buying an existing business is which of the following?

Industry averages for expense ratios comparing expenses to ______ exist for every size and type of business.

Tangible assets are the product of a firm's past earnings and the basis on which future earnings are projected.

Assets that a business owns that can be seen and examined are known as ______.

The amount paid for goodwill should be small enough to be recovered with new profits in a reasonably short time period.

Tabitha is considering the purchase of a seemingly successful retail establishment, but first she would like to gain an understanding of why the business is being sold. With whom should she speak?

To ensure that all back taxes have been paid, a potential buyer should inspect ______.