Valuations and Appraisals

It is critical to determine the purpose of the valuation, especially when it comes time to sell your company. This determination shapes the choice of valuation method(s) to apply because different approaches and concepts may be more appropriate for different purposes.

Most business owners use tax returns or financial statements prepared for tax purposes as the basis for the financial presentation of their business. As a result, the fair market value of the company assets is not reflected because of depreciation and/or acceptable deductions that are written off for tax purposes.

While this may be good for tax purposes, tax return financials do not reflect years of hard work in accumulating business assets. The business goodwill or intangible value, which represents a major component of what the business is worth in many cases, is not a consideration for income tax purposes and, therefore, not addressed in financial statements for tax purposes. Hence the need to obtain a Business Valuation also reflects the goodwill of your hard work and helps maximize the value of your assets in the sale of your company. A Business Valuation is essential when the owner is ready to consider the sale of the business!

Additionally, capital and financing are essential for a business to grow and expand in today's market. The financial presentation reflecting what the business is worth can be a powerful tool in dealing with financial institutions, suppliers, and customers. Thus a Business Valuation may assist in obtaining the funding necessary to expand and achieve your financial objectives.