Seller Offer Comparison: Cash, Dated Payments and Contingencies

Method and interpretation

Use a common comparison date and review each offer’s price/debt/cash basis. All amounts are USD. Dates use actual calendar days. Receipts are positive; fee, payoff and externally supplied tax rows are costs. Earnout rows are a separate user-entered contingent case and never enter the scheduled base. Scheduled does not mean guaranteed.

Reconciliation

Stated price components = closing consideration + note principal + holdback principal + maximum contingent cap. Interest is excluded from that headline reconciliation. The tool displays differences from entered headline price and unscheduled cash/note/holdback amounts. It does not fill missing payments. A schedule exceeding the corresponding stated principal/cap is rejected to prevent duplicate principal or balloons.

Nominal and present value

Scheduled net cash = scheduled receipts − dated entered costs. Present value = Σ signed cash flow ÷ (1+r)^(days from comparison date/365), where r is the entered effective annual scenario rate. Zero rate returns nominal net cash. This actual/365 convention is explicit; leap days count as actual days. It is not an AFR, note-rate compliance test, risk-adjusted appraisal or tax valuation.

The manual stress multiplies only note-principal and note-interest receipts by the entered receipt percentage and moves them by the entered delay days. It infers no additional interest, late fee or probability. All other scheduled flows stay unchanged. Contingent case cash/PV is shown separately and is not expected proceeds.

Worked example

Offer A pays $1,000,000 at the common comparison/closing date. Offer B pays $850,000 then and $200,000 note principal plus $16,000 stated interest exactly 365 days later. B’s headline principal consideration is $1,050,000; scheduled receipts including interest total $1,066,000. At an illustrative 10% effective discount rate, B’s scheduled PV is $1,046,363.64. In a zero-note-receipt stress, B leaves $850,000. This does not select a better offer or establish that payment will occur.

Validation and review

One to three offers, up to 500 payments per offer, unique offer/payment references, valid input dates from 1900–2200 and nonnegative finite amounts up to $1 trillion are supported. Effective discount scenario is 0–1,000%; receipt stress 0–100%; delay 0–3,650 whole days. Receipts cannot precede closing, closing consideration must use the offer’s closing date, and no flow precedes the common date. Costs before closing are allowed after the common date. Imported repeated metadata must match exactly.

Taxes, collection risk, security, legal rights, consent conditions, indemnities and valuation need separate evidence. No company tax is calculated. IRS Publication 537 explains why principal/interest and tax timing need separate treatment. See the allocation guide and earnout guide for their distinct review tasks.

Primary references

This numerical framework is explained in the companion guide. Contract, accounting and transfer conclusions require the actual evidence and appropriate review.