Business figures become useful only when you know what they measure, where they come from and which costs or risks they omit. Sound decisions connect reported earnings with cash flow, investment needs and the purchase price.
Practical example
A deal can look affordable on paper yet strain the business if debt repayments fall during months of weak trading.
What to check before moving forward
Budget beyond the purchase price
Calculate not only the purchase price but also the cash needed to operate after completion. Allow a buffer for advisers, repairs, applicable taxes and working capital.
Actual cash flow
Analyse actual cash receipts and payments, collection periods, suppliers and reinvestment needs. Attractive accounting profits do not guarantee enough liquidity to service debt and keep trading.
What the asking price includes
Check what the asking price covers: equipment, stock, property, deposits, cash and any debt adjustments. A headline figure without a breakdown cannot reliably be compared with other deals.
Conditions for completion
Separate essential closing conditions from preferences. Financing, permits, leases and the outcome of diligence may determine whether the transaction can complete.
Professional advice
Where legal, employment or tax consequences arise, obtain Spanish professional advice. General guidance cannot replace reviewing the actual contracts and circumstances of the deal.
How to use this guide
Start by requesting sources for each important claim and noting what remains unverified. Cross-check answers against records, visit the operation where appropriate and bring material risks to an adviser before committing. Never fill missing financial figures with your own assumptions.
Evidence worth requesting before you proceed
A sales description is a starting point, not proof. These documents help distinguish verifiable facts from expectations:
- Outstanding debt and repayment schedule
- Financing offers and required security
- Bank statements and reconciliations
Request information appropriate to the negotiation stage and respect confidentiality arrangements. Sensitive documents may be shared only after a buyer is identified.
Final takeaway
A sound transaction starts by defining what changes hands, checking the facts and documenting the agreement. Use this guide as a map of questions, not a replacement for a review tailored to the actual business.
General information only; not personalised legal, tax or financial advice. Rules depend on the transaction and may change.