Category Archives: Valuations

The Gap between Legal Advice and Financial Reality

Introduction to the Income Statement in Valuation Engagements As an attorney, understanding how to read and interpret an income statement is crucial, particularly in the context of business valuations. An income statement provides a snapshot of a company’s financial performance over a specific period, detailing revenues, expenses, and profits. This financial literacy enables attorneys to…  Continue Reading »

What If You Only Used One Metric For Business Valuation?

In the realm of business valuation, harnessing the power of private sales transaction data (DMDM) opens a world of strategic insights and informed decision-making. As we delve into the nuances of pricing multiples, it’s crucial to understand not only their advantages but also the pitfalls that can arise, especially when relying solely on metrics like…  Continue Reading »

Why We Fix Expenses for All Owners

Introduction Discover the intricate world of business valuation, where normalizing expenses unveils the true value of companies, ensuring fairness and accuracy in financial assessments. Business valuation involves assessing the worth of a company, and a crucial aspect of this process is normalizing expenses on financial statements. Normalizing expenses is essential as it helps in presenting…  Continue Reading »

Why do Lawyers Need Forensic Accountants in Court?

Optimize Your Fraud Detection Forensic accounting is a specialized accounting field where professionals investigate financial records to detect and analyze issues related to financial fraud, embezzlement, allegations of bribery, and other irregularities. This discipline encompasses not just the ability to record and report financial data but also the legal and investigative skills to uncover fraud,…  Continue Reading »

How a Site Visit Can Enhance Business Valuation Precision

I am often times ask why I need to do an onsite visit of a company.  In the multifaceted process of business valuation, a site visit stands as one of the most pivotal components. A site visit implies a meticulous walkthrough of the business premises, offering the valuator an in-depth perspective and comprehension of the…  Continue Reading »

Why is a Business Valuation so Expensive?

The cost of a business valuation can vary depending on several factors, and while it may not always be extremely expensive, there are several reasons why it can be a significant investment. Here are some factors that contribute to the cost of a business valuation: Complexity of the Business The more complex the business structure,…  Continue Reading »

The Five Forces of Industry

Revenue Ruling 59-60, the Holy Grail of Business Valuations states that industry analysis is a factor that is fundamental and requires careful analysis in each case. The question becomes, where do you find information on how to analyze an industry. Five Forces of the Industry Michael Porter, Ph. D, discusses the five forces of the…  Continue Reading »

Can I Have Your Business Valuation Model So I Can Update It Myself?

Performing a business valuation is a complex task.  It can require 40 hours with no work experience to approximately 132 hours of training with 10,000 hours of work experience to obtain a business valuation credential.  Obviously the 132 hour training program is more in-depth and rigorous. Business Valuation Certifications The intent of these types of…  Continue Reading »

What Does Fair Market Value Mean to Me?

For a business valuation, different Standards of Value are defined differently but the application of approaches and methods may be different. Definition of Fair Market Value “… as the price at which the property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy…  Continue Reading »

How to Disqualify an Expert that Uses a Calculation of Value

Different States have different standards for determining the business value in litigation settings.  Typically the standard of value will be Fair Market Value or Fair Value.  The standard of value sets the requirements for the development work needed to be completed by the business valuator.  The standard of value describes the circumstances under which the…  Continue Reading »

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