Business Valuations

Owners’ compensation is often one of the largest expenses on a private business’s income statement. So, the IRS monitors it closely. It’s also one of the most contentious adjustments that’s needed to accurately value a business.

Do financial statements tell you how much a business is worth? Not directly. But they can be a useful launching pad for the cost approach.

In M&As, sellers want to maximize the sales price. The key is finding a buyer who appreciates the company’s synergistic value.

Can you name three ways to value a business?

Noncompete agreements can be valuable to a business, especially after a merger or acquisition. How valuable? That depends on the facts and circumstances of the deal.

Financial statements are prepared for financial reporting purposes. When they’re used to value a business, various adjustments may be needed to provide clarity. Here’s guidance on which adjustments valuators consider when

To discount or not to discount? The answer is critical when valuing a minority shareholder’s interest. On a combined basis, discounts for lack of control and marketability can lower value by 20%, 30% or more.

Valuing a business is like hunting for treasure. Your expert must dig into the subject company’s books and records for clues to unearth the answer.

Owners of struggling businesses may want to assess how much their operations are worth for many reasons, including M&A, estate planning, shareholder buyouts and bankruptcy. Here’s an overview of how valuation professionals treat these special circumstances.

Many CEOs joined the “Great Resignation” in 2021. Unfortunately, some businesses will struggle without the continued involvement of a so-called “key person.” This is a major risk that must be factored into the valuation equation.

Financial statements are a logical starting point for valuing a business. The cost approach begins with the balance sheet. Is this approach right for your situation?