A $1.1M liquor store purchase price was based on $260K in seller’s discretionary cash flow.

But: ❌ Inventory was not included but was being purchased separately
❌ Owner took home $80K in cash sales annually—not reported
❌ No CapEx allowance for cooler replacement
❌ Payroll did not include 2 working family members ❌ Over $50K of inventory constituted shrinkage

We adjusted FCF to $75K. Value dropped significantly.
📌 The lender was glad we looked under the cap.