Business Valuations Print E-mail

ImageIt is relatively easy to determine the value of interest in a publicly traded business entity.  Simply open the Wall Street Journal, locate the stock price and multiply that number by the number of shares.  Determining the value of Closely Held Businesses is more challenging because of the market conditions and the industry in which it operates.  The definition of a Closely Held Business is a business that is owned by relatively few stockholders (or partners) and is not publicly held, i.e., not traded on a national or local stock exchange or in the over-the-counter market.  

While the actual methodology is in valuing publicly traded verses closely held businesses is very similar, there are distinct considerations that must be observed when valuing closely held businesses.  Most of these considerations relate to the differentiation of ownership benefits, the quality and availability of information and the market of available buyers.

Using the most widely recognized valuation methods, SAI Valuations arrives at an opinion of the estimated value of the interest in a business entity as of a given point in time.  The ownership interest valued may be a company’s common equity or the total equity of invested capital, both equity and debt.

SAI Valuation appraisers are accredited by the American Society of Appraisers and our reports comply with the standards set forth by USPAP (Uniform Standards of Professional Appraisal Practice), which lends credibility to intended users and within the legal community.  Visit Why Accreditation Matters to learn the importance of accreditation when selecting an appraiser. 

Business Valuation Purposes 

There are various reasons for business valuations.  The following are a few of the most common:

•    Buying or Selling all or a partial interest of a business
•    Mergers
•    Financing
•    Insurance
•    Divorce
•    Corporate or partnership dissolution or recapitalization
•    Bankruptcy or Reorganization
•    Fraudulent Conveyance
•    Gift, estate, and inheritance taxes
•    Charitable contributions and Goodwill accounting
•    Estate planning
•    Preparing personal financial statements
•    Employee Stock Ownership Plans (ESOPs)
•    Determining damages (Breach of contract, business loss, antitrust, class action or lender liability suits, etc.)
•    Allocation of total value (ownership interests / assets)
•    Ad valorem taxes (property taxes)
•    Dissenting stockholder suits

Note: SAI does not provide audit or tax services, which allows us to remain independent for tax related and Sabranes-Oxley purposes.  We work with CPA firms and other outside advisors in arriving at unbiased and objective conclusions.  When SAI testifies on behalf of taxpayers in disputes against the IRS and DOJ matters, many cases are settled favorably for the taxpayer prior to trial.  In almost all cases, the IRS will accept our conclusion at the examination or appellate levels, without material change.


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Valuation Reports

» Oral Reports

The Oral Report provides a general opinion of current “market value” presented as part of expert testimony or for informal engagements.  This product may include only limited research, or general scrutiny of the overall status of the business.

» Summary Desktop Appraisal Reports

A Desktop Appraisal provides a "fair market value" based on specifications furnished by the client or an outside third party.

» Full Appraisal Reports

This appraisal product covers all the relevant points supporting the valuation conclusion, including detailed calculations and financial data.  These reports provide the most comprehensive and legally defensible analysis of the subject data.

» Internal Reports

Internal Reports are prepared by industry analysts for their employee’s internal use. They designed for “in house” and are not disseminated to outside parties.

For a free consultation, call 888-814-8258 toll free within the United States or 815-786-2826.  Also, you can drop a note via web form from our CONTACT US page.

 
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