Fixed assets

Definition

The equipment, vehicles, and property the business owns and uses.

Why It Matters

They decide two things at once: how much of the purchase price a lender will secure against, and how much cash the business will need for replacements you did not budget. Ask for the depreciation schedule with dates and get the fleet's real ages, because a book value near zero can mean either a well-maintained asset long since paid for or a replacement bill arriving in year two. On an asset sale the allocation across these also sets your future depreciation.

In numbers: A $1.2M deal with $350,000 of appraised equipment gives a lender real collateral, while the same deal with $40,000 of it is financed almost entirely against goodwill.