Ask a CPA

Does the franchise give you an exclusive territory for the length of the franchise period, or can the franchiser sell other franchises in your territory? Under what circumstances can you end the franchise contract, and at what costs to you? How many years has the firm offering you the franchise been in operation? If you sell your franchise, will you be compensated for your goodwill or will it be lost to you? Does the company offering you this franchise have a reputation for honesty and fair dealing among its franchisees? Has the franchiser shown you any certified figures indicating exact net profits of one or more of its members, and have you personally checked the figures with these people? Will the franchiser assist you with: a) A management training program? b) An employee training program? c) A public relations and advertising program? d) Capital? e) Credit? f) Merchandising ideas? If needed, will the franchiser assist you in finding a suitable location? Is the franchising firm adequately financed so that it can carry out its stated plans? Does the franchiser have experienced management, trained in depth? What can the franchiser do for you that you cannot do for yourself? Has the franchiser investigated you carefully enough to assure itself that you can successfully operate at a profit to both of you? Does your state have a law regulating the sale of franchises, and has the franchiser complied with that law to your satisfaction? How much equity capital will you need to purchase the franchise and operate it until your income equals your expenses?

The cash flow statement provides a summary of the firm's operating, investment and financing cash flows and reconciles them with changes in its cash and marketable securities during the period of concern. The cash flow statement is sometimes called a source and use statement. This statement will reveal whether or not the cash generated by the business is enough to pay the principle and interest on the financing required to buy the business.

Some variables that may be negotiated to complete a deal is; the amount of the down payment, the interest on a note taken back, the time the seller is willing to carry the note, all cash verses cash and note deal, the possibility of a consulting contract for the seller as part of the purchase price.

Mutual funds are rated by past performance for the past 3 years as calculated by Morningstar Inc. The rating system in newspapers are represented by 2 numbers such as 4/3.
Ratings range from 1-5, 1 = poor and 5 = superior. The first rating shows the funds performance against a broad group of funds.
The second rating shows the funds performance against a narrower group of more similar funds. The ratings are adjusted for risk.
Two funds might have the same 3 year return but may have different ratings based on the funds volatility.

Mutual funds are usually listed with ratings numbers such as 3/4. A rating of 5 = superior and a rating of 1 = poor. The ratings are calculated by Morningstar Inc. The first rating is based on the grouping of funds into four broad groups. The four groups are domestic stock funds, international stock funds, taxable bond funds and municipal bond funds. The second rating compares funds within a single type of similar funds. The ratings are grouped so that 35% of funds get a 3 while just 10% each get ratings 1 or 5. Note that the ratings illustrate past performance and not future forecasts.

Foe referrals to local CFPs you may call the Financial Planning Association FPA at 800 282-7526 and the National Association of Personal Financial Advisors NAPFA at 888-333-6659.

The Certified Financial Planner (CFP) designation is a professional certification mark for financial planners conferred by the Certified Financial Planner Board of Standards, Inc. (CFP Board)[1] in the United States, Financial Planning Standards Council in Canada[2] and 22 other organizations affiliated with Financial Planning Standards Board (FPSB)[3], the international owner of the CFP mark outside of the United States. To receive authorization to use the designation, the candidate must meet education, examination, experience and ethics requirements, and pay an ongoing certification fee.

You should initially apply online. Go to www.irs.gov/businesses and click on employer ID numbers. Your local IRS service center can also assist you in getting a Federal ein. The phone number is 1-800-829-4933:.

Cash accounting is never mandated by the IRS. In other words, there is no tax-related scenario that forces you to adopt cash accounting Accrual accounting is the system you must use if: 1.You have more than $10 million in annual gross receipts. 2.Your gross annual receipts are less than $10 million but over $1 million and your primary business activity can be classified as wholesale, retail, publishing, sound recording or mining. 3.You are a partnership or tax shelter. 4.You are a farming corporation that meets certain IRS rules listed in Publication 225.

You can file online Form SS-4. Go to www.irs.gov/businesses and click on Employer ID number. Your local IRS Service Center can also assist you in getting a Federal EIN. Call IRS at 1 800-829-4933.