Cash Out (Accounting) Essay, Research Paper
Acct. Term Paper
“Cash Out”
In an October 1998 issue of “Fortune Magazine” in the finance section, an article entitled “Cash Out on Your Own Terms” speaks about a relatively old concept refined for a new market. In the centuries past, wealthy landowners would allow working farmers to live and work on their land and tend the crops and cattle for a portion of the goods and maybe a portion of the profit. The farmer was happy because he didn’t have enough money to buy his own land yet he could still do what he loved and support his family. The wealthy landowner was happy because he had his land working for him and was getting fairly cheap labor and a good return on his goods.
Today the same concept applies to owners of family businesses. When a CEO of a company either needs liquidity or has no relative or partner to pass the ownership to is the main time that owners think about where their business might be going. Many owners of a family business don t do estate planning or strategy until it s too late. Even when the owner tries to plan for the inevitable, he has minority shareholders or kids who don t want to run the business. Every option for the owner has a downside. Selling usually means the owner must give up control. Going public often creates an orphan stock. Employee-stock-ownership plans can burden the CEO with “onerous regulatory-compliance issues,” and leveraged recaps can load the firm with debt. Company owners come to firms such as Heritage Partners because they want to cash out but at the same time keep management control of their company and the Heritage system allows them to do that and help them grow the business too.
Investing in family businesses and then letting owners keep control of their companies after the sale is a novel concept but it s risky. Heritage Partners plan gives cash to owners which usually amounts to about 85% of what their companies are worth, providing new money for growth while leaving them 51% of their firm s stock. Since introducing the plan in 1988, Heritage Partners has invested $250 million in 37 companies whose combined revenues exceed $2 billion. While many are companies with market caps of $50 million, sixteen are small businesses with fewer than 100 employees. Their goal is to stay very involved in a company for about five years, helping it reach its maximum growth potential, then sell it, possibly back to the original owners, or take it public.
In order to make their company attractive to buyers, owners should begin to develop and put in place a real management team. The CEO should be a dynamic, visionary leader. The chief financial officer should be able to offer “instant reporting of data and be a strategic thinker,” and should have a well-known CPA firm begin auditing their financial statements if they haven t already. Small-businesses should beware of the investor who comes in at a huge price, because it s likely he will retrade the deal. Does he intend to make money by building the value of the company through growth or financial engineering? “Tremendously resist pressure from investment bankers to provide unattainable projections. When you tell people you re going to hit certain numbers, you d better hit them. Nobody wins if you come in too aggressively.” This is a prime example of conservatism in the real world. Investors are looking for unique companies in every area “from the educational toy market to a company that manufactures products for industrial cleaning just as long as the family really believes in their company, and they feel passionately about it.”
This system, in my opinion, is an outstanding philosophy of the business world in America. When a company like Heritage Partners can come in and save a potential death of a company from any certain situation, it becomes a win-win position. Unlike the old days with the wealthy landowner and the poor farmer, today the relationship between companies like Heritage and small-business owners can be a beneficial and fair one.
Many sole business owners are of the entrepreneurial background and may have even built their company from the ground up. These people have to be hard working people with the strength to go into the world and create something like a business and nurse it into success. When times go sour, weather it be financially or even emotionally, sometimes these owners can pull their company out of the dungeon and other times there is just nothing they can do. When times like these arise these hard working people would never want to see all their work leave their grasps, and that is when companies like Heritage Partners can be a saving grace to the companies life and even the owners life. When a company has been in a family for years it is the identity of that family and it portrays a sense of pride and when situations jump out where that identity and control could be jeopardized, the help of Heritage is an outstanding one. Just as this option is beneficial for the company owner it is, without a doubt, a marvelous opportunity for the larger business such as Heritage to buy out and be involved as long as they are fair and reasonable.
I had heard of this market idea before in companies like Venture Capital but it wasn’t until I read this “Fortune” article that I grasped the whole concept. From what I had perceived before this market niche isn’t looked highly upon by many people. Some small-businesses may think that these companies perform forceful buyouts and therefore big business destroys small-business. My reason for selecting this topic is because I now realize after researching this subject that it is because of market inventions like this one that our country is the land of opportunity.
Другие работы по теме:
Use This With Your Parents To Get
A Check For Anything (or Cash) Essay, Research Paper (I worte this in 7th Grade, I think I have used it (or or one like it) to get cash for anything… just add some stuff to it and make it look official. Have Fun!
Becoming A Cpa Essay Research Paper Becoming
Becoming A Cpa Essay, Research Paper Becoming A Certified Public Accountant (CPA) LaChelle Mitchell UMUC- ACCT. 221 What is a CPA? These three letters mean that you have received a broad-based education. They mean you have passed all parts of a very difficult exam. They mean you have the knowledge, skills and abilities to be a trusted business advisor to your clients or employer.
Diversity In The Accounting Profession Essay Research
Paper This article is an account of a panel discussion concerning diversity among the accounting profession. Minorities and Women continue to be underrepresented in the accounting profession. There are a few different reasons why this is so; ?a lack of knowledge among minorities about a CPA career, or a ?glass ceiling?, that discourages entry into the profession or leads to an early departure; and competition from other professions?.
Giovanni Boccaccio Essay Research Paper Giovanni BoccaccioBoccaccio
Giovanni Boccaccio Essay, Research Paper Giovanni Boccaccio Boccaccio was born in Paris, in 1313, the illegitimate son of a Florentine merchant and a French noblewoman. Reared in Florence, he was sent to study accounting in Naples around 1323. He abandoned accounting for canon law and gave that up for classical and scientific studies.
Business Money Flows Essay Research Paper
This is the flow of all money, both into and out of the business. When bills are paid or stocks are bought, the money flows out, but when the products are purchased the money flows in. Bills cannot be paid if there isn?t enough money
Quickbooks Pro Essay Research Paper The world
Quickbooks Pro Essay, Research Paper The world today is in the computer age. Almost everyone now has a computer or access to a computer. Now that almost everyone knows how to use a computer, almost every business has one. Business?s before had to rely on people to do all the accounting by hand, and doing the accounting for a business used to take a lot of man-hours to complete.
Me Essay Research Paper SUMMARY
Me Essay, Research Paper SUMMARY Offering over 20 years experience, and a comprehensive background in all areas of office management and accounting. Ability to thoroughly research, and analyze situations and propose creative solutions.
Bush Tax Proposal Essay Research Paper IPI
Bush Tax Proposal Essay, Research Paper IPI adresses the tax cut proposal that President Bush is presenting before Congress. IPI feels that althouh Al Gore had a good plan for the national tax cut by decreasing the national income tax, George Bush’s proposal was much better because it not only lowers income tax, but also eliminates estate and death tax (accounting for almost 66% of the 1,437.8 billion dollar cut).
Accounting Essay Research Paper Christys Lemonade Stand
Accounting Essay, Research Paper Christy?s Lemonade Stand START-UP On the first Saturday after school is out, Christy and her family go to the park for a picnic. After lunch, Christy, who is eight years old, takes a walk around the park with her Dad. At one end of the park, she sees young girl selling lemonade in front of a house across the street.
Up My Ghan Essay Research Paper protection
Up My Ghan Essay, Research Paper protection because the total revenue did not exceed the variable costs that was incurred in the barial of people that wish to be baried in their cementary. Article #1 Date: November 2, 1999
Credit Cards Essay Research Paper Should teens
Credit Cards Essay, Research Paper Should teens have a credit card? Some people feel that it is a good thing for a teen to have. Others see it as a bad thing. I feel that it is a good thing to have if you are teen. There are a couple of reasons for this. For instance, if you need some extra cash because you have run out of money when you were at the gas station a credit card would be helpful.
Cash Balance Essay Research Paper Cash Balance
Cash Balance Essay, Research Paper Cash Balance Pension Plan In corporate America, the majority of workers have been introduced to pension plans. A pension plan can be defined as a payment, not wages, made regularly to a person (or family) who has fulfilled certain conditions of service and reached a certain age.
Barnes Vs Amazon Essay Research Paper Amazon
Barnes Vs. Amazon Essay, Research Paper Amazon and Barnes and Noble In the decision of investing in Amazon or Barnes and Noble, I recommend neither. Looking at the present state of both companies, neither displays good, strong expectations of profits. Instead, I see both companies with low projected earnings growth ratios and negative cash flow.
Persuasive Essay Essay Research Paper Persuasive EssayThesis
Persuasive Essay Essay, Research Paper Persuasive EssayThesis Statement: The key opportunities will be changing processes to reduce the delivered cost of materiel through cost accounting, imbedded cost and cash flow.I. Cost AccountingA. activity-based costingB. end productC. expendituresII. Imbedded CostA. customersB. quality controlC. paying back invisible costsIII.
My Fist Job Essay Research Paper My
My Fist Job Essay, Research Paper My first job was a job I would never want to work again. For one year I worked at an Arby s restaurant. I heard about the job from my father who knew the owner of the restaurant. I went to apply for the opening and to my amazement there was no application or interview asked of me. I was handed a uniform and put to work.
Accounting Essay Research Paper People with money
Accounting Essay, Research Paper People with money need to be extremely careful whom they build relationships with. There are always slime balls out there looking for the easiest way to make a living. Whether it s their friends, spouse, banker, accountant, or broker they need to know and trust these people.
Human Resource Accounting Essay Research Paper Although
Human Resource Accounting Essay, Research Paper Although human resource accounting is a relatively new field, its development has passed through certain stages. The first stage of development from 1960 to 1966 was marked by interest in the HRA and HRA concepts. The initial motivating factors for the HRA came from economic theory on human capital, leadership determining skills and a concern to develop humans as good sources of capital for companies.
Real Estate Essay Research Paper Mathematics
Real Estate Essay, Research Paper Mathematics ? Knowledge of numbers, their operations, and interrelationships including arithmetic, algebra, geometry, calculus, statistics, and their applications
Food Stamps Essay Research Paper while others
Food Stamps Essay, Research Paper while others think that giving away food stamps is a helpful thing, i think that the gov. should stop distrubuting food stamps. the aqusition and use of food stamps is frequently abused. people can easily obtain food stamps by creating their eligibility even if it involves cheating. one thing i believe that the government should stop handing out food stamps is that most of the people who receive food stamps are capable of working.
Discuss The Importance Of Depreciation Expenses Essay
, Research Paper Title: Discuss the importance of depreciation expenses. The concept and practice of depreciation plays an integral part in a company s cash flow situation and funding. The two main reasons this occurs are that firstly depreciation is a for of self finance, and secondly because a company does not have to pay taxes on depreciation, hence excluding taxation from a cash amount which enlarges the cash flow of a company.
Discuss The Importance Of Depreciation Essay Research
Paper Title: Discuss the importance of depreciation expenses. Depreciation as a concept and in practice plays a very important role in a company?s cash flow hence in funding. The reason?s are basically two, firstly because depreciation is a way of self finance for an organization and secondly because is a way of decreasing taxes that the government claims as the company doesn?t have to pay taxes on depreciation which consequently enlarges the cash flow of the company.
Accountant Essay Research Paper A college student
Accountant Essay, Research Paper A college student decides she wants to become an accountant. General accounting and bookkeeping classes can be taken in high school. In college, the student needs to decide on a more specific field of accounting. An accountant has many choices as to what particular field of accounting to specialize in depending on the financial information she wants to analyze and how it is done.
Joke Essay Research Paper Pretty funny You
Joke Essay, Research Paper Pretty funny!!!! You could die laughing…… A little old lady went into the Bank of Canada one day, carrying a bag of money. She insisted that she must speak with the president of the bank to open a savings account because, “It’s a lot of money!”
Accounting Essay Research Paper ABC is crucial
Accounting Essay, Research Paper ABC is crucial because it tells managers which products or services make or lose money – they usually don’t know. Traditional cost allocations often depict an unrealistic, inadequate view of profitability, sometimes distorted by hundreds of percent. In most cases, ABC is designed to provide profitability information for each segment of their product/service market matrix.
Accounting In General Essay Research Paper Accounting
Accounting In General Essay, Research Paper Accounting In General Gone is the old stereotype of an accountant with eyeshade and bifocals, sitting hunched back with a pencil in hand over pages of tiny figures. Accountants today come equipped with calculators, computers, sophisticated management techniques, and more often than not, advanced degrees.
Accounting 2 Essay Research Paper Statistical concepts
Accounting 2 Essay, Research Paper Statistical concepts are used in various aspects on industry. The following highlights the use of statistics in these industries: Accounting/Auditing, Insurance, and Medical (Pharmaceutical).In the accounting/auditing field, it is imperative that the auditor makes an effort to determine that financial statements are stated accurately and free of material error (appear to be stated accurately).
Accounting Project Essay Research Paper Accounting ProjectBAC
Accounting Project Essay, Research Paper Accounting Project BAC 3AA Profile of an Accounting Department My interview with the accountant of Robin Hood Multifoods Inc. was one of the greatest interviews I have ever experienced. The person whom I interviewed was
Accounting Essay Research Paper ACCOUNTING THE LIFELINE
Accounting Essay, Research Paper ACCOUNTING THE LIFE-LINE OF THE BUSINESS WORLD Christian De Church Professor Hercer Communications 215 April 18, 2000 Introduction What goes on in business and other organizations? How are their activities carried out? Who is responsible for them? And, what part does accounting play? These questions and many more are often thought about by many confused and mislead business majors.
Accounting In The New Millenium Essay Research
Paper Accounting IndustryThe role of accounting in the future looks good. Based on the articles I read, Management Accounting is going to be the wave of future for accounting. Because of new management techniques, accounting has become more vital to the company as a whole. Some of the new ways of management include total quality management (TQM), just-in-time (JIT) production and purchasing methods and activity-based costing.