A Basic Guide for VALUING a Company phần 1 ppsx

[...]... comparability? Comparable value is an appraisal term, and I maintain that business valuators are not really a part of that fine organization called the appraisal society True, business valuators can certainly be appraisers and do most often use selected appraisal tools, but they must also be something quite different—behavioral scientists Yes, my belief is contested, but the more than 1, 200 valuation assignments... should always appraise real estate as a stand-alone value, because it can often be sold with or without the business and because real estate ownership usually comprises the most valuable of business assets It can also be the asset least affected in its value under the ‘‘hammer’’ of liquidation and can be the most viable asset pledged as collateral in terms of financing or refinancing the business as a whole... real estate values are not add-ons to business values predicted through cash flow analysis Cash flow value determinants predict what ‘‘can’’ be paid for the real estate, but not ‘‘what’’ the real estate is worth in market terms Market values of real estate and other hard assets collectively can enhance or negate the values of the business as a whole When cash flows will not support the purchase of hard... performance influences stock market performance of the public company s trade prices, individual stockholders tend to have little or no direct say in how the company is run Stockholders of the closely held company have all the say in how the company is run, because individuals are quite regularly one and the same as management and because they often are the company 4 Stocks of the public company can fall... machinery, and equipment are present Businesses such as these may frequently sell to customers who tend to be less ‘‘attached’’ to the small -company owners Bear in mind also that hard assets will comprise most of the financing collateral for loans and that ‘‘market value’’ is substantially influenced by prevailing economies An existing bank ‘‘climate’’ will affect market value Additional cash and/or attractive... occasionally about the use of financial tables, as many expert technicians also do Formulas, like languages, if not used daily can cause even the competent mind to wander and fail periodically Try reading the 846 pages in Handbook of Financial Mathematics, Formulas and Tables by Robert P Vichas (Prentice-Hall), if you doubt my concerns over formula usage! My point: Mastering DCF methodology is beyond the reach... hard and too long for cash-out may translate into no deal at all Structuring ‘‘installment’’ sales has tax benefits that should not be overlooked As long as constructive receipt is divided into at least two tax years, capital gains tax may be less under present laws Considering present legislative discussions, capital gains and depreciation treatments may even get better The key to safety in private financing... private agendas, and valuation specialists are no more or less acceptable to the players than are accountants and lawyers The closely held arena is filled with I-wantto-gain motivations (often quite rigid individual motivations of both buyers and sellers), and third-party advice is frequently considered no more 6 Setting the Stage valuable in negotiations than the contents of a baby’s messy diaper What... virtually immaterial to estimates of its value—and values are values regardless of whether stock or asset transactions are on the table Now I know that some of you may ‘‘technically’’ find reason to disagree with this statement specifically when small companies acquire other small businesses, both reacting as entities But this transaction is rare in the arena where most small -company transfers occur... held company has no ‘‘free-floating’’ or market value that is detached from the value of tangible and intangible assets held by the company itself Management and/or private investors, since their objectives are to make a buck solely from the company s performance itself, organize their companies along lines that best ‘‘shelter’’ incomes and/or reduce exposures to personal liabilities Because management . comparability? Comparable value is an appraisal term, and I maintain that business valuators are not really a part of that fine organization called the appraisal society. True, business valuators. Production and Retail Sales) 13 7 Chapter 16 Retail Hardware Stores 15 8 Chapter 17 Retail Garden Center 17 0 Chapter 18 Grocery Store 18 8 Chapter 19 Manufacturer with Mail-Order Sales 204 vi Contents Chapter. a business that was sold at arm’s length). This book is a companion to A Basic Guide for Buying and Selling a Company. And as with its companion, that ‘‘rascal’’ perception must be equally handled.