Valuing a Business – Certified and Market Analysis Reports
The value of a company traded on Wall Street is published in the paper every day or streamed to you smartphone – knowing the value you can get for this investment of yours is easy.
When the stock is of a business in which you invested your career is closely held, and located in the local industrial park, determining value is not so simple.
aBeacon Equity appraises and advises on the value of a business for a variety of reasons, and offers both Certified Valuation Reports (typically for litigation, estate planning, ESOPs following established appraisal procedures, IRS and State court guidelines) and Estimates of Value (typically for Market Analysis reports related to a sale)
For a closely held business, value is determined by analysis of the business components taken as body of work, including:
|
Staff skill
|
|
|
Product
|
Profits
|
|
Equipment
|
Trends
|
|
Permits
|
Revenues
|
|
Location
|
|
|
Barriers to entry
|
Future prospects
|
|
Management skills
|
Owner time requirements
|
|
Industry
|
|
|
Gross Margins
|
Pending/Potential legislation
|
|
Curb appeal
|
Economy
|
|
Balance sheet
|
R & D
|
|
Quality of the CPA statements
|
and on and on and on…..
|
Everything gets factored into value, right down to how clean is the shop floor.
For our list of 40 Intangible assets, click here
Then we ask, what would the buyers say – there are four different buyer groups, each of which will look at the business from a different perspect
ive, apply value to a greater or lesser extent to the different assets and come up with a value – Each buyer type / group will come up with a different value. We work to determine which group would value the subject business the highest. Which group would offer the most cash at closing. Which group sees the greatest future opportunity to grow the business to the next level. Which group needs the business. Which group has access to the best funding. What are the banks and mezzanine financing organizations saying about this type of business and their interest levels.
ive, apply value to a greater or lesser extent to the different assets and come up with a value – Each buyer type / group will come up with a different value. We work to determine which group would value the subject business the highest. Which group would offer the most cash at closing. Which group sees the greatest future opportunity to grow the business to the next level. Which group needs the business. Which group has access to the best funding. What are the banks and mezzanine financing organizations saying about this type of business and their interest levels.This too gets added to the valuation calculations and opinions
This is why our team is made up of certified appraisers and merger and acquisition specialists who have valued hundreds of businesses. We are ready to learn about your company and assist you in establishing the proper selling price for your business.
“No Formula can be devised that will be generally applicable to the multitude of different valuation issues.” “Valuation…Is in essence, a prophecy as to the future.” – Internal Revenue Service Revenue Ruling 59-60
