How much cash can be generated from the business?
Other answers, though important, are of secondary importance, such as:
What is the business worth?
Who is the biggest competitor?
What is motivating the seller of the business?
Therefore, the businessperson when purchasing a business should examine the business aspects of his investments. This involves looking at:
1. the income statements
2. the capital reinvestment requirements, and
3. the cash generating capabilities of the business or investments.