Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Business Valuation / Business Enterprise Appraisals

By Patrick O Connor Subscribe to RSS | April 24th 2012 | Views:
loading
 
  



Business valuations are performed using methodology similar to the process for real estate appraisals. However in business valuation, the data sources are different. Further, there are nuances in the form of analysis.

Reasons for business valuation engagements include the following:

estate tax valuation and planning

business purchase price allocation;

divorce;

loan documentation;

litigation;

research to determine the asking price for a business;

documentation that a purchase price is equitable.

Options for business valuation include :

Multiple of revenue -- the revenue multiplier varies from industry to industry and with the size of the business. The appraiser compiles data for similar types of businesses with similar levels of sales and determines the business valuation based upon industry rules of thumb, features for the subject property and comparable sales and data for the sales .

Comparable sales -- the appraiser seeks information for similar businesses which sold recently including revenues, net profits, assets, liabilities.

Cash flow/income approach/earnings based methods -- options include a discounted cash flow analysis and multiplier of net income (typically net income before interest, taxes, depreciation and amortization, sometimes referred to as EBITDA).

Asset based valuation -- this business valuation method is a hybrid of the net value of assets plus a multiplier of annual cash flow. The multiplier is typically relatively low since it is added to asset value.

Methods for business valuation vary with the type of business. Mid-market to large businesses are more likely to sell based upon a multiplier of EBITDA. Smaller businesses are more likely to sell based upon a multiplier of revenue or an asset based valuation methodology. The success and outlook for the business also affects the business valuation method and multiplier. A business with poor recent financial results and uncertain future prospects is more likely to sell based upon assets than on a multiple of revenue or EBITDA. A successful mid-market business with steadily growing revenues and net profits would be more likely to sell for a multiple of EBITDA.

O'Connor and Associates is the largest independent appraisal firm in the southwestern United States and has over 40 full-time staff members engaged full-time in business valuation and market study assignments. Their expertise includes business valuation, commercial and single-family real estate appraisals, business personal property valuations, purchase price for businesses allocations, property tax appeals valuations, partial interest valuation, estate tax valuation, expert witness testimony, and valuation for condemnation. They have performed over 20,000 appraisals since 1988.

Patrick O Connor - About Author:
The appraisal division of O’Connor & Associates is a national provider of commercial real estate appraisal services including highest and best use,

financial modeling, cost segregation studies, due diligence, insurance valuations, feasibility studies, feasibility studies, gift tax valuations, highest and best use analyses, casualty loss valuations and HUD map market studies.

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/real-estate-articles/business-valuation-business-enterprise-appraisals.htm

Related Real Estate Articles Subscribe to RSS

Get an absolute idea before opting for business credit loans
Published by Macrobusinesscapital@gmail.com on January 15th 2012 | Finance
The growing world and the rapid increase in the technology have completely changed the life of human...
 
Business loans or business grants what is better?
Published by Macrobusinesscapital@gmail.com on December 10th 2011 | Finance
Pumping up your business with adequate funds is always what you need as an entrepreneur. To get the ...
 
Why is Chicago an excellent region for business?
Published by Kiya Mateo on January 20th 2012 | Real Estate
Most of the important companies are situated in Chicago and naturally a lot of specialists operate i...
 
Blake cab offer some of the most reliable debt collection agency results of any business of its kind in the UK
Published by Mary Porter on July 12th 2012 | Finance
If you have incurred lost monies then here at Blake debt collection industry we have the experience ...
 
Want to buy Miami luxury homes? Get to know luxury real estate miami business
Published by Angie Turner on May 25th 2012 | Real Estate
Envision a stifling location with tall palm trees; sun flounced white sandy shores and several class...
 
Manage your business records & transactions with Bookkeeping Service
Published by Nelson on January 23rd 2012 | Finance
Complete End to End Business Solution offering various services such as Incorporation, Bookkeeping, ...
 
Make business simplified with Bookkeeping Services
Published by Nelson on April 25th 2012 | Finance
Complete End to End Business Solution offering various services such as Incorporation, Bookkeeping, ...
 
Why lease a Docklands office for your business?
Published by Kerri Lissa on February 20th 2012 | Real Estate
You may be considering moving your company but you may not have looked yet for a particular site as ...
 
Are fully services offices suitable to my business?
Published by Mike Nicholson on April 19th 2012 | Real Estate
When I heard about “fully serviced offices” for the first time in my life, I took them as fully ...
 
Unsecured business loans are funds with fast approval
Published by Macrobusinesscapital@gmail.com on February 3rd 2012 | Finance
There may be several reasons for someone to look for additional or basic finance for his or her firm...
 
Overcome finance related business issues with a reliable insolvency company
Published by Ashish Pandey on January 16th 2012 | Finance
Any business might go through different kinds of hurdles and when things get out of control it is go...
 
Making business in Turku area
Published by Jinny Rios on July 18th 2012 | Finance
The shipbuilding and food industries are featured on the area, but the recent newcomers it-technolog...
 
What you need to know about business financing?
Published by Matthew Anthony on February 23rd 2012 | Finance
To get finance for your new business can give you a tough time. But business financing Las Vegas fa...
 
Get fast business funding within days of applying
Published by Merchant Cash on March 29th 2012 | Finance
As with any business, your organisation is all about your ability to manage your customers and your ...
 
Locating Added Capital for the Small business
Published by Timothy Powell on June 15th 2012 | Finance
At times, 1 of the most hard tasks faced by business owners is acquiring sufficient capital to opera...
 
Has your business grown to Serviced Office Melbourne?
Published by Mitt on May 19th 2012 | Real Estate
They say change is constant or rather change is the only constant and they also say one is never too...
 
Getting the most out of your unsecured business loans
Published by Mathias Scott on June 14th 2012 | Finance
An unsecured loan is one that you get without having to put forth a collateral. In this form of lend...
 
How to get a small or new business grant
Published by Church Henry on June 16th 2012 | Finance
Special grants are given by the authorities for starting up new and small businesses that most peopl...
 
Exactly how might London be a better location for your business?
Published by Kiersten Jeffery on December 5th 2011 | Real Estate
If you are thinking about moving to a new office then you may have thought about London as a possibl...
 
Sahara Infrastructure and housing expands its business by introducing 10 lifestyle township projects
Published by Sanchita Kumari on June 27th 2012 | Real Estate
Sahara India Pariwar is among the top business conglomerate in the India. The company has diverse in...