Business Valuation Basics Washington CPA Tiffany Couch
Washington CPA Tiffany Couch, Acuity Forensics’ founder and principal agreed
If you are new to the business valuation or never needed a business valuation until now, business valuation is a simple term to define a process of estimating what a business, estate or property is worth. This could refer to you personally, your business, or even intellectual property such as a patent.
Business valuation is a process and a set of procedures used to estimate the economic value of an owner’s interest in a business. Business valuation is used by financial market participants to determine the price they are willing to pay or receive to perfect a sale of a business.
In finance, valuation analysis is required for many reasons including tax assessment, estates, divorce settlements, business analysis, and basic metrics on business performance. Since the value of all things will fluctuate over time, valuations are as of a specific date. Valuations do not last forever; it is recommended that a business valuation be completed every two to three years or whenever the need arises. Remember value changes.
There are many reasons why someone would need a valuation done. Maybe you are selling your business. When you sell, a valuation will be needed to determine how much your company is worth.
If your company is getting to the stage where you want to buyout a company or maybe complete a merger. You will need a valuation.
Key person life insurance reduces risk and provides resources in case of a loss of key personnel. A valuation could be used to determine how much insurance you need.
Business Valuations are needed for many business situations and include:
· Employee Stock Option Plans – where IRS rules can require annual market valuation data
· Partial Business Buyout
· Financing or Investment
· Estate & Gift Taxes
· Purchase Allocation
· Fairness Opinion
· Life Insurance
· Shareholder Agreements
· Tax Considerations
· Buyer/Seller Agreement
Tiffany Couch, Washington, agreed that Dale’s presentation made hard Business Valuation Principles more understandable.
Tiffany, a Washington CPA, Acuity Forensics’ founder and principal agreed that Dale made hard Business Valuation Principles more understandable. Then added more valuable content when he explained how to Increase Business Value, Financially, Operational and Strategically.