Business valuations may be required or beneficial for various reasons, including determining sale value, establishing partnership ownership, taxation, divorces and other litigation and anything else that may require the regulation of the business. Professional business valuations take bias out of the process and objectively estimate the business’ true worth.
While there are several methods for determining a business valuation, they all generally include an analysis of the company’s management structure, capital structure, and future earnings projections or the market value of assets.
Business valuations may be necessary for tax reporting (i.e. gifts, estates, etc.) since the IRS generally requires that a business be valued based on fair market value. Additionally, tax-related events, such as the sale or gifting of shares of company shares, may be taxed based on valuation.
The professionals at Shuster & Company, PC, are experienced in creating accurate business valuations across a number of sectors and industries. They can also help you select the best valuation method to reflect your company’s worth. They have experience in many valuation methods, including:
- Multiples of Private market Comparables: This method finds comparable sales.
- Times revenue method: This method relies on applying a multiplier (based on industry and economic conditions)to a stream of revenues.
- Earnings multiplier: This method capitalizes adjusted profits.
- Discounted cash flow method: This business valuation method is based on capitalizing the cash flow.
- Adjusted Book value: This method is the value of shareholders’ equity of a business as reflected in the adjusted balance sheet.
- Liquidation value: This method is the net cash a business could expect to receive if all assets were sold today.
No matter what industry you work in, the professionals at Shuster & Company, PC, can provide you with a reasonable business valuation.
A full-service Certified Public Accounting Firm located in Denver, Shuster & Company, PC provides quality, personalized financial advice and guidance to individuals, businesses, and the legal community. We offer an extensive range of services, with emphasis in forensic accounting, business valuation, and litigation support.
A Business valuation is used to estimate the economic value of a business (or a partial interest in a business) as of a point in time. They are often used in marital dissolution's, economic damage claims, shareholder disputes, partnership disputes, estate and gift tax planning, buy-sell agreements and selling or buying a business. Business valuation is critically based on judgment, experience and relevant information. Since our founding, we have performed numerous financial analyses and valuation opinions for business and individual clients in a wide variety of industries.
Our industry experience includes: