Category Archives: Valuations

Business Valuation: Depreciation and Capital Expenses Not The Same in Terminal Year

There are many reasons for a client to need to determine the value of a company.  Revenue Ruling 59-60 is the impetus for all business valuations (appraisals).  When preparing a forecast, the future capital expenditures (typically equipment needed for growth) and future depreciation needs to be estimated. Depreciation Based on Generally Accepted Accounting Principles Economic…  Continue Reading »

Business Valuation: Not Normalizing Operating Expenses

There are many reasons for a client to need to determine the value of a company.  Revenue Ruling 59-60 is the impetus for all business valuations (appraisals).  There are three approaches that are utilized to value a business.  The three approaches are the Asset-Based Approach, Income Approach and the Market Approach.  Underneath each approach there…  Continue Reading »

The Truth Behind Weighted Average Cost of Capital Minority Interests

There are many reasons for a client to need to determine the value of a company. Revenue Ruling 59-60 is the impetus for all business valuations (appraisals). There are three primary approaches used to develop a discount or capitalization rate that are utilized to value a business. The three primary approaches are the Build Up…  Continue Reading »

Recent Webinars Available On Demand

Richard Claywell was a panelist on two recent Financial Poise webinars and both are now available On Demand. The first was Where Did All My Profits Go? Mastering the Concept of Working Capital.  Part of the Financial Poise MBA in a Day Series, this webinar helps clarify what parts of the balance sheet make up working…  Continue Reading »

Upcoming Webinar: Nuts & Bolts of Lost Profit Cases

On Tuesday, April 10, Richard Claywell will be presenting as a panelist in Financial Poise’s webinar series: Complex Finance Litigation 2018. The panel of experts will explain the circumstances that warrant lost profits claims, key considerations for both the claimant and defendant, and how such claims will ultimately be evaluated. In order to successfully win (or…  Continue Reading »

Court Increases Dissenters’ Buyout Offer by More than 25%

In Re: Appraisal of Dell Inc., Delaware Ch., C.A. No. 9322-VCL, May 31, 2016 When computer maker Dell decided to delist in 2013, its board agreed to buy out dissenting shareholders for $13.75 per share. The dissenters argued that the buyout price was unfair — and the Delaware Chancery Court recently agreed, valuing the stock…  Continue Reading »

Trial Court uses DLOM to Achieve “Fairness and Equity”

Parker v. Parker A New Jersey trial court applied a 25% discount for lack of marketability (DLOM) to punish a selling shareholder for his oppressive behavior toward the purchasing shareholder, in this appraisal rights case. In New Jersey and other jurisdictions that follow similar rules, some valuation professionals worry that this decision could set an…  Continue Reading »

Customize M&A Terms to Fit Your Needs

Make a deal Are you interested in selling (or buying) a business interest in Texas? The gap between how much the buyer is willing to pay and how much the seller expects to receive can be bridged by incorporating creative options into the purchase agreement. Earnouts A portion of the sales price is typically withheld…  Continue Reading »

The Role of Forensic Skepticism in Lost Profits Calculations

Financial experts have a variety of tools at their disposal for calculating lost revenues and avoided costs when analyzing claims for lost profits or other business damages. However, it’s also critical to look behind the numbers for signs that they might have been manipulated or falsified. This “forensic skepticism” is part of what makes forensic…  Continue Reading »

6 Ways Financial Experts Can Help

Cases of business interruption Whether business interruption is caused by a natural disaster like in Houston, Texas, or another party’s wrongful act, it can disrupt a company’s cash flow and threaten its existence. The key to survival is to restore normal operations as quickly as possible, and insurance plays a critical role. The purpose of…  Continue Reading »

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