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.
The CAPM cost of capital model requires no introduction. It is used by business appraisers, savvy investors, and even the general public on occasion. Ask your friendly securities broker about betas. You will be regaled with a list of investment prospects with different levels of risk and return, along with the beta number for each… Continue Reading
You may wonder how a casual check on business value differs from a professionally prepared business appraisal. For instance, out of curiosity business people may run a quick and dirty calculation to ball park the value of their company. 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 tools available in ValuAdder software. Normalize your financial statements to get ready for valuation ValuAdder financial worksheets always gave you the ability to run the Capitalized Earnings valuations. First, you go through the financial… Continue Reading
Once in a while in a life of many businesses a ‘bad actor’ manages to cause harm. Enough 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. In… Continue Reading
It goes without saying that in business valuation time is money. Moreover, 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, you need to review and revise your assumptions quickly. So… Continue Reading
Valuing a business? Then doing a market comparison against similar business sales should ring the bell. Indeed, both seasoned valuation pros and business people find the market approach to business valuation easy to grasp. Do your market comps hold water? But, as often in life, the devil is in the details. In fact, the International… Continue Reading
You know the drill – buying and selling shares of stock in public companies is just a mouse click away. You pick up a few shares you like, hold on to them as long as you want, then unload them if you like the current market price. Sounds easy enough, but here is a trick… 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 details. Without a thorough work up of the cost of capital you can’t get usable discount and capitalization rates. Slick data brokers would have you believe that they somehow create the market data… Continue Reading
If there is one professional endeavor that has a lot of proverbial moving parts, it is business valuation. Small wonder you face a number of standards that govern how you should do your business appraisal. The accountant’s standard – AICPA SSVS No 1 A relative new comer to the field is the Statement on Standards… 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. Are you are doing business on the Web? Then your customers may be distracted dealing with a host of problems caused by the troubled economy. Business sale comps It is… Continue Reading
When all hell breaks loose, you may wonder: how does it affect your business valuation? Apart from broken windows and missing merchandise 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. Sometimes they appear to be in conflict with major business valuation standards. As an example, your local court may call for just a market based business valuation even though the USPAP or International Valuation Standards (IVS) expect you to… 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