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.
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
This may be obvious to the professional appraiser, but many business people often wonder – why are business earnings forecasts such an essential part of business valuation? Shouldn’t a business be valued on its historic financial performance record? Why do a business valuation? Think about a typical situation in which a business needs to be… Continue Reading
Thinking of valuing a company in the telecommunications industry? Consider some key industry stats: This large and highly diverse industry sector is classified under the NAICS code 517. For example, in the USA there are some 50,600 telecom companies competing across a broad spectrum of product and service offerings. Moreover, the industry as a whole… Continue Reading
If you are valuing a business using the income based methods, creating a viable earnings forecast is essential. Your business valuation result depends on your ability to accurately predict the income stream and assess business risk going forward, not an easy task. What do you value – Business highfliers or cash cows? No one has… Continue Reading
This group of business assets is of increasing importance to business value creation. Here is the short list: Trademarks and service marks Non-compete agreements Website domain names Trade marks and service marks are generally protected intellectual property. Businesses often seek their registration, such as the Federal trademarks issued by the US Patents and Trademarks office… Continue Reading
Business valuation is a constant challenge for the business people and professionals alike. While many security analysts do not have the accounting background, they often engage in valuing companies. Professionally managed firms, especially public companies, must adhere to the consistent financial accounting and reporting rules such as the GAAP mandated in the US by the… Continue Reading
Fundamental to the business valuation process is the need to make assumptions about future events. What the business is worth today depends upon future cash flows. These future business earnings are a function of business future performance, financially and operationally. Business value is about the future earnings and risk No matter how you slice it,… Continue Reading
If you are working on a business appraisal, a big part of the analysis is reviewing the industry outlook. In many ways, the industry in which the business competes is far more important than the general economic situation. If you are valuing a strong company in a growing industry, its valuation is likely to be… Continue Reading
When it comes to business valuation, forecasting the business future financial performance is one of the most challenging, yet necessary tasks. Business value is about risk and returns going forward. Assessing how well you expect the business to do is at the core of establishing its value. There are two ways to prepare the assumptions… Continue Reading