Our firm has a Certified Valuation Analyst on staff, Brandon Layo! What does that mean for you?
We can offer valuation services in the following areas:
- Advanced Financial Statement Analysis
- Advanced Company Analysis
- Buying/Selling Ownership Interest in a Company
- Litigation/Remediation Related Valuation Work
- Valuations for Divorce Proceedings
- Valuations for Estate or Gift Tax
Accurate Value Determination
The result of an inaccurate value determination, regardless of whether it is high or low, generally leads to undesirable consequences. For instance, if the value is too high, estate taxes will be too
high; savvy investors or prospective buyers will usually disregard a value that appears too high. If the value is too low, you can be sure savvy investors or prospective buyers will recognize it and
take advantage. Likewise, if you are on the other side of the dispute in a dissenting shareholder action or divorce, you certainly want to know you are receiving an accurate value for your interest.
Determining the true value of a business enterprise requires a careful analysis of two primary components that make up value: tangible assets such as real estate, machinery, and furniture used by
the business; and various intangible assets such as business or personal goodwill. Intangible assets might also include customer lists, trademarks, copyrights, distribution rights, a superior management
team, non-compete agreements, physical location, special processes, and name recognition.
Understanding the Business
To properly value a business enterprise, the CVA must acquire a thorough understanding of every aspect of a company’s dynamics, including: management capabilities, company strengths,
weaknesses and vulnerabilities, the competitive environment, overall expectations for the marketplace, and future economic prospects for the industry and the economy in the region and as
a whole. All of these elements affect the risk of ownership in a particular enterprise, and risk directly impacts value. Additionally, the valuator must analyze the inherent financial health of the
enterprise and its future profit potential.
Sorting Through a Complex Process
After a thorough analysis of all the company’s dynamics and its financial health, the CVA must select the most appropriate methodology from among the many accepted by the valuation
industry, and apply a series of calculations and formulas to arrive at the ultimate conclusion of value. Overall, the process is highly complex and requires a significant amount of time. Indeed,
this is what is required to determine the true economic value of a privately owned business enterprise, and this is what a CVA brings to your table.