ValuAdder Business Valuation Blog

Archive for the 'Business Valuation Tips' Category

Choosing the appropriate earnings basis for your business valuation is key. One choice made by professionals is the Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). However, like any tool, it has its pros and cons, which merit careful consideration. Some points: Pros Normalization of Earnings and Expenses Adjusted EBITDA allows for the normalization… Continue Reading

You can use business valuation for various transactions, including mergers and acquisitions, investment decisions, and even internal assessments of the company’s value. Among the methods employed in business valuation, revenue multiples have gained popularity for their simplicity and accessibility. However, while revenue multiples can offer you quick insights, relying solely on them can lead to… Continue Reading

Businesses recognize the value of contracts if they offer advantages in terms of lower operating expenses, competitive position, or critical asset retention for some period of time. Consider the important types often seen in successful companies: Leases of business premises. Supplier and other vendor agreements. Employment contracts with key staff members. Licensing rights. Franchise agreements.… Continue Reading

When business appraisals come under the scrutiny of courts, lawyers on both sides reach out to appraisers to testify as expert witnesses. Who gets selected? Usually, attorneys tend to pick the professionals who offered such expert opinions in court before. But how does an appraiser get selected for the first time? Clearly, an attorney decides… Continue Reading

Why do conflicts in business valuation arise? When business owners don’t see eye to eye they may be tempted to part company and go their separate ways. Naturally, they would want to be compensated for their share of the business. And this creates the need for a business to be appraised. If the dispute is… Continue Reading

Valuing a business? Then the need to figure out the discount and cap rates for minority and controlling investments may be in the cards. Appraisers call this step in the valuation process assessing the cost of capital. Reliable evidence you can use to figure out your cost of capital comes from the public capital markets.… Continue Reading

Non-compete agreements happen quite often as part of a business sale. As a result, you should have a decent idea of the agreement’s value in order to allocate part of the business purchase price to it. Usually you would have a written contract obligating the business seller to refrain from setting up a competitive business… Continue Reading