Business Valuation

Business Valuation Overview

A business valuation or appraisal is an independent process of determining the value of a business, business ownership interest, security or intangible asset as of a specific date. Business valuations are most commonly needed in order to calculate estate tax upon death, determine family asset amounts in a divorce, and to negotiate value in a purchase, sale or merger of a business enterprise. Other common purposes where the holder of an interest in a privately held company might require a business valuation include:

  • Business Sale
  • Financing Support
  • Buy/Sell or Shareholder Agreement
  • Shareholder Disputes
  • Marital Dissolution / Divorce
  • Employee Stock Ownership Plan (ESOP)
  • Estate Planning
  • Insurance Claims
  • Gift Taxes
  • Litigation Support
  • Company Mergers
  • Partnership Buyout
  • "C" Corporation to "S" Corporation conversion
  • Allocation of Purchase Price
  • Management Information Appraisal

Our business valuations services are performed by qualified professionals. We provide a full range of appraisal services from a Basic Business Valuation Report to a Certified Business Appraisal. There is a fixed fee for each level of service. Please contact us to obtain a Schedule of Fees. To better assess your needs, we offer a free half hour consultation to review your particular requirements.

Management Information Appraisal

A prime objective for all business enterprises is to improve and maximize its value to the owners. One of the best reasons for obtaining a business valuation is to use it as a management tool. A properly prepared business valuation provides management with insightful information that helps identify company strengths and weaknesses that affect value. Identifying these value drivers help management to more effectively focus their energies in places that really count.

A periodic business valuation also serves as a measurement tool to help owners assess overall success and management effectiveness. The National Association of Certified Valuators and Analysts, the nation's leading organization supporting the business valuation discipline, recommends performing regular business valuations every two years for management purposes - if for no other reason

Valuation / Appraisal Services

  • Basic Business Valuation Report – This is a formal summary report that is used primarily for non-litigation situations. It is a restricted-use abbreviated report and it may be all that is required for determining the selling price of a business or assisting in establishing a buy-sell agreement between partners/shareholders. This report generally involves the examination of one to three years profit/loss statements and the determination of adjusted net earnings. It does not include the verification of financial information supplied by the owner or verification of the value of fixtures furniture and equipment. It is not suitable for Internal Revenue or Court purposes.

  • Management Information Appraisal – This is a computer generated valuation report which includes a review of 3 to 5 years financial statements, recasting of profit/loss statements to determine discretionary profit, an analysis of the balance sheet and depreciation schedule including adjustment of machinery and equipment to Fair Market Value (FMV). It includes as many approaches to valuation as practical, the reconciliation of those approaches, and the application of minority or marketability discounts in the value determination.

  • Short Form Business Appraisal Report – This formal comprehensive report is suitable for litigation support and review by third parties such as the IRS. The report explains in a step-by-step manner what was done and how the value was derived. It includes a statement of purpose and function, an analysis of national, local and industry economies, a review of 3 to 5 years financial statements, recasting of profit/ loss statements, recasting of profit/loss statements to find discretionary profit, an analysis of the balance sheet and depreciation schedule including adjustment of machinery and equipment to FMV. It includes as many approaches to valuation as practical, the reconciliation of those approaches, and the application of minority or marketability discounts in the value determination.

  • Comprehensive Business Valuation is a CERTIFIED valuation report that includes a statement of purpose and function, an analysis of national, local and industry economies, a review of 3 to 5 years financial statements with comparison to tax returns, recasting of profit and loss statements, an analysis of the balance sheet and the depreciation schedule including adjustment of machinery and equipment to Fair Market Value, the use of as many approaches to valuation as practical including Discounted Future Earnings and Market Data or Guide Line Company approaches, reconciliation of approaches used, application of minority or marketability discounts, and a post valuation client meeting.

24301 Southland Drive Suite 409 Hayward, CA 94545 Direct: (510) 397-1942  eFax: (510) 315-0145 Email: info@united-business.net

Licensed by CA Bureau of Real Estate ID: 01186051