G & A ????

**NewBizz** · 01-17-2007 02:17 AM

I am looking over the books from a buisness I am thinking about buying, The gross sales for 2006 are 940,000.
the bottom line is -214,000 ? there is a 245,000 G & A allocation ? what is this exactly. is it a real deduction or allocated money for next year or what ?
I can't pitch this to a bank with numbers like this, I'm sure the loss is for tax purposes. After I write a business plan will the bank want to actully see the books ?

**The Stealthy One** · 01-17-2007 06:32 AM

G&A refers to General and Administrative expenses.

Generally, losses concentrated here are not for tax purposes. Therefore, I would suggest proceeding with caution. At the very least, it's time to bring on an accountant or M&A advisor who can help you out a bit in analyzing the data.

**kbud124** · 01-17-2007 10:43 AM

Ask for a breakdown of what is in the G&A number. Is it payroll, office supplies, etc? Get a more detailed financial statement (e.g. from quickbooks, peachtree, etc).

The most common non-cash expenses would be depreciation and amortization. Also add back any officer salaries/perks to get a better picture.

What kind of business is it?

I'd suggest looking at a minimum of 3 years of tax returns. Also, during due diligence be sure to verify using the bank statements / bills. Its a pain but will help understand what you are getting into.

Let me know if you need any help / suggestions.

**NewBizz** · 01-18-2007 04:35 PM

It's a Bar & Grill, With a banqute center.

**kbud124** · 01-18-2007 04:49 PM

Does it come with the building?

**NewBizz** · 01-18-2007 10:22 PM

Yes, $750,000, been in business 2 years, my wife has been the manager

**kbud124** · 01-19-2007 09:36 AM

since they own the real estate, there is most likely some depreciation calculated in those figures..however I doubt that the amount of depreciation is causing that big of a loss..dig deeper into the figures..also ask why they are selling after 2 years only