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

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...
 
Considering a move to Dallas? Here is what it can offer to your business:
Published by Jazmin Judah on December 27th 2011 | Real Estate
In the past few years an increasing number of companies have decided to move to Dallas, so if you ar...
 
Get easy finance for your new business venture
Published by Macrobusinesscapital@gmail.com on January 21st 2012 | Finance
Do you want to start your own business, which requires funds but don't have idea on how to arrange t...
 
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...
 
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, ...
 
Give your business a leading edge by having an office space in Gurgaon
Published by Mike Nicholson on March 20th 2012 | Real Estate
A large number of people dream of running a successful business venture but only few of them actuall...
 
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 ...
 
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...
 
What benefits does Jacksonville offer your business?
Published by Lily Jaylen on January 13th 2012 | Real Estate
If your company offices are in a city that is not too far from Jacksonville or maybe even just outsi...
 
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 ...
 
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 ...
 
Benefits of using business lines of credit
Published by Kemar Roach on June 12th 2012 | Finance
Small business line of credit is a kind of financing that is offered by a lot of business banks and ...
 
Proposed audit legislation: Good for business or political posturing?
Published by Becky on March 14th 2012 | Finance
219 businesses across the UK responded to a recent survey with their thoughts on audits, reporting a...
 
Set up new strategies for your business with Bookkeeping
Published by Nelson on March 14th 2012 | Finance
Complete End to End Business Solution offering various services such as Incorporation, Bookkeeping, ...
 
Bookkeeping performs an extremely important role in every business
Published by Nelson on February 29th 2012 | Finance
Complete End to End Business Solution offering various services such as Incorporation, Bookkeeping, ...
 
Bookkeeping services...Utilizing tricks for development and growth of business
Published by Nelson on January 27th 2012 | Finance
Complete End to End Business Solution offering various services such as Incorporation, Bookkeeping, ...
 
Apply for small business grants
Published by Macrobusinesscapital@gmail.com on March 8th 2012 | Finance
Small businesses and entrepreneurs have a large contribution in national economy. They are one of ma...
 
Tips for applying start up business funding
Published by Macrobusinesscapital@gmail.com on November 25th 2011 | Finance
For all business owners how to borrow more effectively is quite a lesson to understand business borr...
 
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...
 
Why a business advance has more advantages
Published by Mathias Scott on April 2nd 2012 | Finance
For those people running small businesses in the current economy, they all know the trouble associat...