There are many errors made in business valuations. This is in part because almost all businesses are bought and sold via the term “EBITDA Multiplier” (Earnings before Interest, Taxes, Depreciation, and Amortization).
Out of the nine different valuation calculation, I use three established valuation methods:
• Asset Method
• Market Method
• Income Method
Terms can be beneficial when working with a valuation professional.
When is a Valuation Needed?
• Financing Sale/Investment
• Estate & Gift Taxes
• Purchase allocation/Fairness Opinion
• Employee Stock Option plans
• Life Insurance/ Shareholder Agreements
• Tax vs. Value Considerations
To better understand the above, take for instance the first valuation process, merger/acquisition. For a merger or acquisition transaction, it is critical that multiple method valuations be completed. KNOWLEDGE IS POWER. If just an Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), the multiplier is used, what data do you have to increase your knowledge or negotiation power? None.
You have to look at each point above in detail. As a professional valuator I can walk you through the step
What is Business Valuation Dependent Upon?
• The Purpose of the Valuation
• Market Conditions
• Comparable Companies
• Risk Factors
• Business Financial History & Projections
• The Cosmetic Business Appearance
• Management Team
• The Business Appraisers Perspective
Excel, Dale Richards, Valuation Expert helps the client to understand the process. Tammy from Asphalt Materials, Salt Lake City, Utah, contracted Dalel to valuation their business for possible acquisition. She was very pleased with his understanding and help.
Learn more about Business Valuation Principles by Dale S Richards https://successbiznow.com/books/business-valuation-principles-by-dale-richards/
ABOUT DALE S. RICHARDS:
Preview Dales presentations: Watch Dale In Action Dale S. Richards specializes in management, marketing, operation optimization & business valuation consulting and is a 25+ year turnaround expert. He has implemented success concepts into results in 150+ companies. Dale is a Certified Valuation Analyst (CVA) with NACVA, a Vistage International CEO-Board Chair in Utah and a World and Vistage International Speaker. Visit www.successbiznow.com to learn more about Dale and business valuation services.