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.
Business people have a number of reasons to get a business valuation. So it’s small wonder that business appraisers have come up with a plethora of services to address their clients’ requirements. Not all business valuation experts offer all the services. For example, many firms specialize in certain areas, such as litigation support or estate… Continue Reading
Having trouble finding a set of business sale comps to figure out what your company is worth? You are not alone. The market approach to business valuation offers undeniable advantages when valuing a company. But it suffers from one flaw – you need to have reliable, current, and transparent business sale comps. Valuing public company… Continue Reading
Why value a software development company? The short answer: because these businesses tend to create a lot of value. Just think about it: where would the world be today without all the software apps? Technology moves at a dizzying pace. So new and sometimes even useful software apps pop up seemingly every minute. Software everywhere… Continue Reading
If your company looks like most businesses, you may have noticed the familiar picture. Some business assets that appear on the books are no longer around. And others that the company uses all the time don’t show up on the records. Business property taxes and business asset values Sooner or later it comes time to… Continue Reading
Discounted cash flow method, or DCF for short, is well known in business valuation. You forecast business earnings, assess business risk in the form of discount rate and calculate business value in present day dollars. But you could also use the DCF method as a great way to calculate your discount rate. To do so,… Continue Reading
Now you must think someone is joking, right? Surely, there is no such thing in business as excess earnings. As the saying goes, the more the better. Don’t get confused though – in business valuation, as in many financial analysis areas, technical definitions make all the difference. Excess earnings – more than a pretty name… Continue Reading
Valuing a business by discounting its cash flows? Guess what’s lurking in the discount rate. Yep, the renowned equity risk premium. Better yet, business appraisers like to drop a formal name for this number – the implied equity risk premium. What is going on? Can you spot the equity risk premium in the discount rate… Continue Reading
Pick up a text book on corporate finance and you will run right into the discounted cash flow valuation method. It is so important that it usually deserves a chapter on its own. Students sweat it, professors hammer in the fundamentals, professionals remember the bruising experience studying the DCF method for years afterwards. Lurking in… Continue Reading
Are you are valuing businesses internationally? Then consider complying with the International Valuation Standards or IVS for short. These standards cover valuation of all types of assets world-wide. For example, businesses, real property, personal business property, market securities and more. In the United States, the USPAP set of standards has long governed appraisals across the… Continue Reading
You heard the old adage, ‘time and tide wait for no man’. None more apt than in business appraisal. You don’t have to go back a ways to see why. Remember the heady days of the Great Recession? Businesses were trembling in anticipation, markets creaked at the seams, and politicians spouted their usual platitudes and… Continue Reading
In the complex world of business valuation keeping things simple may seem a distant dream. Just think about the challenges faced in valuing a company. For instance, analysis of economic conditions, forecasting business earnings, assessing risk, choosing the right valuation methods. And interpreting results that may puzzle the unwary. With so many moving parts, it’s… Continue Reading
Putting the business on the market? Valuing the business to set the right asking price or make an acceptable offer is half the battle. Stray but a little and the deal will likely go south. You have a choice of three approaches to business valuation, namely the asset, income, and market. And of these three… Continue Reading
In the context of business valuation, professional business appraisers call it excess earnings. Do not confuse it with the notion of business people making more than they should. Excess earnings is a technical term and it plays a central role when valuing a business under the asset approach. This valuation method is formally known as… Continue Reading
Surprised? Then consider a typical situation calling for a business valuation – a company put up for sale. Business owners are proud to discuss the past track record of the business and especially how much money they were able to make. Business value is in your dreams Investors and buyers look at the company from… Continue Reading
Whenever the subject of business valuation comes up, the notion of valuation multiples is sure to follow. Business people and professional appraisers are quick to point out their favorite valuation multiples for a ballpark estimate of business value. Business sale comps – market barometer of value What is behind the popularity of these valuation tools?… Continue Reading