Work with an expert when it’s time to value your company
Oftentimes, business owners require a valuation of their company. Some might believe that they know the value of their business down to the last penny. But they’d likely be wrong. Placing a correct value on a business is only achieved via a complicated process, which is best left to a professional appraiser. The purpose behind […]
What is your business worth?
This article originally appeared in the Cincinnati Business Courier, Goering Center Supplement. October. This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February. – Mark Twain The reasoning above could certainly be applied to valuing small businesses. The […]
Manufacturing valuations are complicated and require key knowledge
Appraising manufacturing businesses isn’t an easy task. Multiple aspects of these companies have intangible assets that may provide value in addition to the value of a company’s hard assets. However, qualified appraisers can ascertain the value of manufacturing companies by applying various valuation methods, such as the income, market and cost (or asset-based) approaches. By […]
In business valuation, normal matters
There are many valuation approaches and methods, but they all have one thing in common: Ultimately, the value of a business is derived from its ability to generate earnings in the future. Typically, the starting point for measuring a company’s earning power is its financial statements and other documents that reflect historic financial performance. But […]
When a business is being valued, consider the real estate
If a client owns an office building or manufacturing facility, or any other type of real estate for that matter, it will affect the business’s value. So, the issue at hand is how? Finding out will generally require the input of both a business valuator and a real estate appraiser. Assumptions and inputs Business valuators […]
How calculation engagements can provide an indication of value
1 + 1 = 2 Preparing a formal valuation for a client requires much work on the part of the appraiser. It can, therefore, be costly. But in many situations, a full-blown valuation isn’t necessary. That’s when an appraiser might suggest using a calculation of value instead. Here’s an overview of the difference between valuations […]
How capital structure affects business valuation
A company’s capital structure — essentially, its blend of equity and debt financing — is a significant factor in valuing the business. The relative levels of equity and debt affect risk and cash flow and, therefore, the amount an investor would be willing to pay for the company or for an interest in it. A […]
Recession troubles linger, How distressed businesses are valued
Although there are signs that it’s waning, the great recession continues to challenge businesses nationwide. Some are still slipping into bankruptcy, while others are sticking to tight budgets to stay afloat. Struggling companies that remain in the game may be prime targets for a takeover. But if you’re on the lookout for an acquisition, make […]
Careful scrutiny by courts now impacts valuation experts
Tax Court to valuators: Explain yourself! Estate of Gallagher, T.C. Memo. 2011-148 (June 28, 2011) Gross v. Commissioner, T.C. Memo. 1999-254 (July 29, 1999) The U.S. Tax Court’s opinion in Estate of Gallagher is instructive for both attorneys and valuation experts. It demonstrates the court’s inclination to scrutinize expert testimony and demand that experts […]
Business Valuations: Helping businesses through worst-case scenarios
Helping businesses through worst-case scenarios Key-person discounts estimate the value of a VIP If a business depends greatly on just one or two people, a valuation discount may be appropriate to reflect the risk of damage to the business should such a key person die or otherwise leave the company. To determine whether the discount […]