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Top Five EBITDA Adjustments Oftentimes, earnings before interest, taxes, depreciation and amortization (EBITDA) are used as a proxy for a firm’s operating cash flow. While EBITDA can be interpreted in different ways, this type of earnings stream can be used to produce a value for a business or business interest by the application of a… 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 >>>
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 Tax Cut and Jobs Act (TCJA) contains a provision for reasonable compensation as defined in IRS Code Section 162. Reasonable compensation has always been an important issue in business valuation, but the TCJA has put a much brighter spotlight on the matter, which will be closer scrutinized starting in 2018. There is a new… 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 >>>
Many business owner’s when they want to sell their business, often read about an EBITDA (earnings before interest, taxes, depreciation and amortization) valuation multiples. But when they’re questioned further, what they really mean is they want to sell for a higher EBITDA valuation multiple than discussed in the industry journals. Here, I will identify occurrences… Continue >>>
As mentioned in a previous article, valuing intangible assets can be an important part of any business valuation for marital dissolutions, gift tax determination, estate planning, shareholder rights cases, conversion from C corporation to S corporation or sale of a business. An experienced business appraiser will help you identify the intangibles unique to your business,… Continue >>>
Webster’s dictionary defines “concentration” as the act or process of concentrating, especially the fixing of close, undivided attention. In business valuation context, it is assessing a company’s risk profile and financial outlook. The presence of substantial concentrations (i.e., risks) frequently results in a lower value, than what otherwise might be expected. Concentrations, from a conceptual… Continue >>>
Most business owners know that planning for retirement is crucial. However, according to Entrepreneur magazine, very few business owners are aware of the true value they have. Many have not taken the necessary steps to receive an accurate business valuation well before considering retiring. This makes it somewhat difficult to ensure they receive adequate value… Continue >>>
Our certified appraisal services help determine company value for many financial institutions in Arizona and nationwide. This includes performing business valuations for SBA and conventional financing. Our stock valuation services are performed by certified appraisers, who are well-versed in determining the value of a business. Valuation of a company is most often required of a… Continue >>>
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