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.
When it comes to business valuation, the market approach reigns supreme. Think about it – where else can you glean the values of businesses better than from the active, observable market place where companies change hands every day? Unsurprisingly, the International Valuation Standards or IVS for short, accord a special place to the market-based valuation… Continue Reading
Valuing a business? Then you would do well to heed the requirements of the USPAP standards. USPAP is a short form for the Uniform Standards of Professional Appraisal Practice. And these renowned standards govern valuation of all types of assets, including real and personal property, collectibles, and businesses. USPAP standard 9 covers business valuation. In… Continue Reading
To the uninitiated it may come as a surprise: there are a number of proven methods you can use to value a business in any industry. It puzzles some business people. After all, they say, my business is unique. And valuing it may differ from valuation of companies that differ vastly. Right? Well, yes and… Continue Reading
Half the battle in business valuation is to clearly state what is being valued. Your business appraisal would be misleading unless you define what equity or debt capital you have included in your value calculations. Equity is just another term for owners’ interest in the business. If you are valuing a corporation this ownership interest… Continue Reading
No surprises there – business valuation delves into some pretty sensitive information. Think about it – generally no public record of a private company financial performance, let alone its value exists. Business owners are not usually ecstatic telling the world how much they are worth. If a private business is put up for sale, business… Continue Reading
Ever wonder why business appraisers take their time to come up with an accurate, defensible opinion of value? If you thought the devil is in the details, you are on the right track. What is included in your business valuation? To keep things interesting, business valuation can measure business value to just about any definition.… Continue Reading
Apple ups the ante again on the security front. All MacOS software apps require notarization. That’s in addition to the Apple Developer ID code signing your MacOS system already checks to identify the software products and their developers as reputable and safe. Apple demands independent software notarization Why this additional security requirement? Apple uses notarization… Continue Reading
Are you creating a business valuation report that must comply with the venerable USPAP standard? Then you have a choice to make: should your report follow the Restricted or Appraisal report format? What is going on here? Restricted Report format – for client only The USPAP Standard 10 draws a distinction between the restricted and… Continue Reading
Even the most experienced business appraisers get confused on occasion. Do the discount or cap rates apply to valuing minority or controlling business ownership interests? One share of company stock – a classical minority ownership interest Why should you care? Because values of controlling shares of business ownership can be a lot higher than the… Continue Reading
Valuing a civil engineering firm in the heavy construction industry? Some sector statistics to consider: There are over 32,600 establishments in this highly competitive industry in the USA alone. Together these companies generate about $256.3 billion in annual revenues. And the average civil engineering firm makes some $7.8 million in sales per year employing about… Continue Reading
If you are valuing a business, assessing the company’s earning capacity and risk should sound familiar. Risk estimation gives you the all-important discount rate to plug into your business valuation. As a result, you can then use it with the discounted cash flow method. Business appraisers use a number of ways to calculate the discount… Continue Reading
If cash is king in business, then an accurate picture of business earnings is king in business valuation. That’s because business value is all about the company’s earning power and risk. It goes without saying then, that a business with a history of superior earnings commands a higher value than its less profitable industry peers.… Continue Reading
Planning on valuing a business in an international setting? Then consider complying with the International Valuation Standards (IVS). Just about in any jurisdiction where business assets are valued, standard compliance is key and the IVS rules the roost. Investigations that precede your valuation One of the key requirements under the IVS is a properly conducted… Continue Reading
Are you valuing a business and plan to share your appraisal results with other business people or professionals? Then make sure you comply with major appraisal standards especially the USPAP valuation standard rules. Perhaps the most important and best known professional standard governing all kinds of appraisals, including business valuation, is the venerable USPAP. This… Continue Reading
Ask a finance professor about the best business valuation method. The answer will be there are three approaches to choose from. When pressed for a simple answer though, even the professor would admit that nothing beats the market comps for valuing a business. Benefits of market comps in business valuation Just think of all the… Continue Reading