ValuAdder Business Valuation Blog

Business valuation tips, updates and advice. Pick up a few suggestions on how to value a business. Feel free to browse the contents or share your thoughts by leaving a comment.

There is a big difference between a casual check on business value and a professionally prepared business appraisal. Out of curiosity business people may run a quick and dirty calculation to ball park the value of their ownership interests. But when business people approach their professional advisors for help, business valuation takes on a whole… Continue Reading

By popular demand from our customers, we have added this gem of a valuation method to an already extensive selection of valuation tools available in ValuAdder software. ValuAdder financial worksheets always gave you the ability to run the Capitalized Earnings valuations. Going through the financial statement normalizing adjustments, you would work up the earnings estimate… Continue Reading

Once in a while in a life of many businesses a ‘bad actor’ manages to cause enough harm to disrupt business operations and lead to a loss of earnings or even a long-term business damage. Unsurprisingly, business owners take a dim view of such actions and bring a legal action to redress the injury. One… Continue Reading

It goes without saying that in business valuation time is money. A typical business appraisal is no walk in the park, so being able to quickly organize and speed up your work translates into big savings. Given the choices in valuation approaches and methods, the need to review and revise your assumptions rapidly is key.… Continue Reading

Valuing a business? Then doing a market comparison against similar business sales should ring the bell. Indeed, the market approach to business valuation is perhaps the easiest to grasp for business people and professional advisors alike. Do your market comps hold water? But, as often in life, the devil is in the details. In fact,… Continue Reading

Struggling to understand how the capitalized excess earnings valuation works? You are not alone. With quite a few ‘moving parts’, this venerable valuation method has tripped even the most experienced business appraisers. But it does not have to be intimidating. Let’s dissect the enigma by stepping through the calculations step by step. First, note the… Continue Reading

Tired of blowing wads of money on overpriced database subscriptions? In business valuation, like in many things, the devil is in the detail. Without a detailed work up of the cost of capital your discount and capitalization rates are not worth much. Slick data brokers would have you believe that they somehow create the market… Continue Reading

If there is one professional endeavor that has a lot of proverbial moving parts, it is business valuation. Small wonder there is a number of standards that govern how you should conduct your business appraisal. A relatively new comer to the field is the Statement on Standards for Valuation Services or SSVS No 1 for… Continue Reading

Business sales tend to drop during economic downturns. None more so than in the midst of a world wide pandemic affecting all customer facing companies. Even if you are doing business on the Web, your customers may be distracted dealing with a host of problems caused by the troubled economy. It is common practice to… Continue Reading

When all hell breaks loose, you may wonder: how does it affect your business valuation? Apart from broken windows and missing merchandize spirited off by those who thrive on turmoil, what do social upheavals do to business value? Good question. Let’s take a look at the fundamentals. No matter what causes the stir in the… Continue Reading

Once in a while you run across business valuation projects that must defer to special requirements which appear in conflict with major business valuation standards. An example is a local court calling for just a market based business valuation even though the USPAP or International Valuation Standards (IVS) expect you to use all three approaches:… Continue Reading

When an economic downturn strikes, one thing is sure to follow: business sales grind down to a halt. In uncertain times moving forward with a major investment entails risk. Business buyers stay on the sidelines afraid to make a bad acquisition that goes south. Business owners step back unwilling to sell their companies for a… Continue Reading

When a business faces a sharp downturn, it may begin to look like a lot of disconnected parts moving in multiple directions. That’s the sign of the times – a systemic threat such as a natural or man-made crisis can wreak havoc with a business that normally runs like a well built clockwork. Effect of… Continue Reading

Cataclysmic events such as deadly pandemics are a major risk to people and businesses everywhere. Business value is all about risk and return. So it should come as no surprise that risky times bring changes to business values. What do the public capital markets tell us about the effect of the Covid-19 pandemic? Just take… Continue Reading