Latest News
What is a reasonable selling price for a business? This is a question that arises for many business owners and others interested in pricing a business. To some degree, every business is unique and therefore, no one-size-fits-all valuation formula works for all businesses or for a particular industry. For example, sometimes a dentist may hear… Continue >>>
The Federal estate tax is a tax on the transfer property at death. It is applied to estates for which at-death gross assets, the “gross estate”, exceeds the filing threshold. Included in the gross estate are real estate, cash, stocks, bonds, businesses, and decedent-owned life insurance policies. Deductions are allowed for administrative expenses, indebtedness, taxes,… Continue >>>
This is a good time to reflect on three important and misunderstood aspects of the role of the valuation professional: The valuation professional. The nature of the finding. How are the findings used. Role of the Professional: Valuation professionals may act as either an “appraiser” or “consultant” – but not both in a single engagement.… Continue >>>
Over the years, we at American Business Appraisers have come to appreciate the many similarities between the practices of medicine and business appraisal: Both involve science – careful, systematic observation and gathering of facts, Application of proven theories, Both involve art – the use of informed, reasoned judgments based on experience and training, Both physicians… Continue >>>
A buy-sell agreement can be an important tool in smoothing any business ownership transition, whether the aim is to maintain control, provide liquidity and a ready market for the stock, retain key employees or ensure an orderly ownership transfer in the case of death, disability or divorce. Of course, it’s important to decide how to… Continue >>>
Startup type businesses get valued at various stages in their evolution. The key point here is startups need to undergo a series of valuation exercises at regular intervals; and the exercise is typically performed with limited financial data being available for the appraiser to use (with limited data being the norm). There are many approaches… Continue >>>
Assessing risk is a crucial part of valuing a closely-held business. Business appraisers use risk assessments in the income approach to estimate rates of return (discount rates) and in the market approach to select valuation multiples. All else being equal, the higher a company’s risk, the lower its value, conversely lower risk (value drivers) increases… Continue >>>
When we develop an opinion of value for a particular operating business, we look at the quality of the financial information as either an additional risk factor or value driver. In business valuation and especially from an investor’s viewpoint, quality of the financial information or truthfulness of the data plays an important role. Everyone has… Continue >>>
Virtually every business has centralized management and/or relies on the talents of a few individuals. This risk of centralized management is taken into account for business valuation purposes in the company’s future earnings or rate of return (i.e., discount rate). In some cases, however, one person is the linchpin, and if he or she leaves… Continue >>>
The three key factors are profitability, growth and risk. Profitability, or more specifically, anticipated benefits will be the most important consideration by investors (i. e., buyers). Anticipated benefits will consider such items as the nature, capital structure, and historical performance. Growth considerations are generally the expected growth in earnings, along with the anticipated outlook for… Continue >>>
Copyright © 1994-2023. American Business Appraisers, LLC. All Rights Reserved.
American Business Appraisers, LLC is an Affiliate of the American Business Appraisers National Network. Privacy Policy
Business Appraisal Website Designed by Reliable Web Designs.
