On the one hand you need us to value material assets. Here we will evaluate inventories and equipment. On the other hand we must calculate your immaterial assets. An example of such abstract assets would be your name brand recognition or stellar employees.
Therefore, We Present the Four Typical Methods:
- The Asset or Cost Method
In this method, we state the company’s assets and liabilities. And we match them with fair market values replacing book values.
We use this method especially for manufacturers, distributors and businesses that maintain many hard assets. You will most benefit from a valuation that stresses factors like inventory and receivables. Plus, we’ll emphasize those fine improvements you made to your facility. And yes, we must adjust for depreciation and any bad debts you encountered.
- The Income Method
Using this the Income Method, we zone in on the benefits of investment in your business. We determine the rate of return versus the risks of investing in your business.
This method offers you a unique formula: We can estimate your business value by dividing its anticipated earnings by a capitalization rate.
As you might guess if you are a start-up or a company with short-term earnings expectations, this might not be the method for your valuation. You probably need a discounted cash flow analyses.
- The Market approach:
For this method, we will use pricing multiples based on:
A.) Researched stock prices of comparable public companies, or
B.) Asset or stock sales of comparable private companies.
We find these multiples in proprietary databases. When we select comparable companies, you will appreciate our use of a variety of criteria. We will look at the size of your company, the condition of the industry as a whole. And we look at your company’s transaction data and overall financial condition.
- The Industry Rule of Thumb Method:
It won’t surprise you to know that Industry pricing formulas help us as checks and balances for our data. Sometimes you hear these formulas at trade conventions or read them in the trade periodicals, online and hard-copy.
However the Rule of Thumb method is never a primary or sole method for a Gavrilov & Co Valuation.
This method is often full of vague generalities and simplified definitions. The rule-of-thumb sometimes omits such critical factors as working capital, up-and-down earning histories or unexpected fluxes in market conditions. This is probably the very method that tripped up those unlucky Shark Tank entrepreneurs who failed in their presentations. They did not understand their worth.
We Offer You Professional Business Valuation with Business Valuators Who have Both Financial Expertise and a Background of Knowledge in Your Specific Industry.
- Understanding your business value is a key factor in planning your strategic decisions about your company. Ask us how…
- Through our valuation process, you can find solutions to the problems of today and anticipate the problems of tomorrow before they occur. We can show you examples…
- In the Present: Our business valuation will help you show your ongoing value to your clients and investors. And our reports help you avoid being underinsured.
- In the Future: Our business valuation helps you prepare for a lucrative sale of your company with complete and ethical transparency. And over 7.7 million companies will make the decision to change hands within the next 10 years.