Business Valuations
Business Valuation establishes the worth of a company by setting values for all tangible and intangible assets. Value is a function of a company’s expected performance at a given date, based on the most likely prospects for the economy, industry, company and market for comparable investments.
Business Valuation is a specialized discipline and should be conducted by someone who can bring the benefits of professional training, experience, and third-party objectivity to the process.
Our conclusions must withstand close scrutiny in court, with tax authorities, or in corporate negotiations.
- Mike Eberhart, CPA, CVA and Keith Arner CPA, CVA hold the designation of Certified Valuation Analyst (CVA) through the National Association of Certified Valuation and Analysts (NACVA).
- The National Association of Certified Valuation Analysts (NACVA) supports practitioners in the fields of business valuation, financial forensics, mergers and acquisitions, and related consulting disciplines.
Three generally accepted standards for valuing a business:
Asset-based approach: 1) Going concern asset-based approach - lists the business net balance sheet value of its assets and subtracts the value of its liabilities.
2) Liquidation asset-based approach - determines the net cash that would be received if all assets were sold and liabilities paid off.
Income approach: This valuation approach is based on the idea that a business’s true value lies in its ability of produce value in the future.
Market Value Approach: This valuation approach establishes the value of your business by comparing your business to similar businesses that have recently sold.
Valuations might be necessary for the following situation:
- Estate Tax and Gifting Planning
- Corporate or Personal Litigation (including divorce)
- Purchase or Sale of a Business
- Tax Compliance
- Mergers and Acquisitions
- Employee Stock Ownership Plans (ESOP)
- Litigation Support
- Bankruptcy and restructuring (solvency, fair value of assets)
- Financial damages (lost profits, lost value)
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