Business Valuation Services

Business Valuation

Business Valuation Services

VAVA Inc. has been engaged in business valuation since 2005. The American Society of Appraisers, a professional accreditation group for appraisers of all disciplines, defines Business Valuation as “the act or process of determining the value of a business enterprise or ownership interest therein.” Business valuations can be performed for corporations, partnerships, sole proprietorships, trusts, or individual or group practitioners. Intangible assets and acquired business assets can also be the subjects of business valuations.

 

VAVA Inc. has performed more than 3,000 business valuations since its formation. The scope of work for each assignment has involved delivering an opinion of value. Value is a very complicated, multifaceted word, but from a business valuation context it simply means “the present worth of future benefits to be received.” Each of VAVA Inc.’s 3,000 plus valuations has measured the expected future benefits that will likely be generated by an entity being examined. An examination of risk is required in each case to convert future expected benefits into a measure of reasonable, risk-adjusted benefits. Cash is used as the medium of exchange in every case.

 

The elements examined in every valuation are outlined in Internal Revenue Service Revenue Ruling 59-60. This was a landmark ruling by the IRS, which recommends that the following factors be examined in conducting valuations:

  • The nature of the business and the history of the enterprise from its inception;
  • The economic outlook in general and the condition and outlook of the specific industry in particular;
  • The book value of the stock and the financial condition of the business;
  • The earning capacity of the company;
  • The dividend-paying capacity of the company;
  • Whether or not the enterprise has goodwill or other intangible value;
  • Prior sales of the stock and the size of the block of stock to be valued; and
  • The market price of stocks of corporations engaged in the same or a similar line of business having their stocks actively traded on an exchange or over-the-counter market.

 

So there you have it; business valuation in a nutshell. Please call VAVA Inc. if we can help you explore the value of your business and business assets.

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