Business Valuation

We provide a range of business valuation and due-diligence services tailored to the needs of the client and to the circumstances of the engagement. Services range from formal valuations required by law or agreement, to informal support of client defined fact finding and due-diligence. If the engagement requires a "conclusion of value" or other such estimate, we will perform the valuation in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP) and the standards of the American Society of Certified Public Accountants (AICPA). If you do not require a full blown formal estimate, we will tailor our services to the circumstances, but will in all cases follow the necessary standards of professional care. Understanding business valuation terminology and methods can be a daunting task. The following paragraphs are not intended to cover the full subject, rather to expose potential clients to the possibilities of work scope as an introduction to further dialogue. 

 

 

 

 

 

 

Introduction
Valuation engagements may be performed for a variety of reasons which include: a) transactions such as sales, acquisitions, buy-outs and the like, b) litigation such as bankruptcy, marital dissolution and other disputes, c) compliance-oriented such as S corporation conversions, estate planning and financial reporting, d) due-diligence such as fact-finding, surveys and calibrating information, and e) any other related client support services.

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Engagement Letter
Our initial consultation meeting will focus on understanding your needs and identifying the appropriate level and course of action. We will document our understanding of the work, methods, end product, standards and other aspects of the job; and prepare an engagement letter prior to beginning the work.

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Valuation Approaches
There are three broad approaches to business valuation: a) income based approaches which consider the future benefit stream of the business, b) asset based approaches which consider the value of the business assets, and c) market based approaches which consider sales and operations of comparable businesses. Within each of these approaches there are a variety of "methods" which are generally accepted within the business valuation community. One or more approaches and methods are generally selected by the valuation consultant based on their judgment and the circumstances of the engagement.

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Due-Diligence and Other Support
If a formal business valuation is neither required nor indicated, then other services may be provided. These services may entail fact-finding, compilation or review of financial statements, site visits, employee interviews, technology assessment, market analysis, or other activities which may or may not be part of the customary valuation process. The following types of information are typically considered in such engagements:
  • Historical Financial Statements and Tax Returns
  • A/R and A/P Schedules
  • Asset Schedules with Depreciation
  • Historical Sales Records
  • Marketing Plans and Objectives
  • Competition Strengths and Weaknesses
  • Customer Lists and Sales by Customer
  • Employee Organization and Lists
  • Systems, Processes and Operating Procedures
  • Contracts with Key Customers
  • Key Suppliers and Contracts
  • Copies of Leases, Legal Agreements, Litigation
  • Corporate Structure, Bylaws, Meeting Minutes

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Pro-Forma Projections
We can prepare forward looking projections of Income Statements, Balance Sheets and other schedules based on "what-if" scenarios developed in conjunction with the client. We identify shortcomings and potential areas for improvement and support the client in formulating their vision for the company. We can also support the identification of important performance metrics so that improvement activities can be quantified with specific schedule goals.

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Business Advice
Our services can be provided either as an independent consultant, in which case we will provide an objective, independent valuation of the company, free to select whatever approaches and methods are in our judgment necessary; or as an advisor, in which case we will work to support a position which is most beneficial to the client. We will always agree up front on which role we assume, and we will work with you to scale the scope of work in either role, to the extent practicable. As part of our service in the "advice" role, we offer level of effort consulting to review and comment on buy/sell agreements, to support clients in their negotiations, or to perform other services as an advocate for the client. Often, these services will suffice and be most cost effective. 

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Other Services