Why does the Profit & Loss statement show a loss?
The name of the game is to pay as little taxes as legally possible. Therefore, the financial statements of a business reflect what the current owner has elected to do with the cash flow of the business. A professional business broker will help you to re-cast the financial statements to show the true cash flow of the business. This is sometimes referred to as “Adjusted Net Profit”, “Cash Flow”, or “Discretionary Cash Flow” Whatever it is called, this is the amount of cash a new owner should be able to spend as he/she desires.
