According to the International Glossary of Business Valuation Terms, Business Valuation is defined as “the act or process of determining the value of a business enterprise or ownership interest therein.” Sounds rather simple and straightforward, but nothing could be further from the truth. It is the “act or process” part that is challenging.
There are numerous methods and approaches to valuing a business and these differ greatly from valuing real estate or other tangible assets. There is a plethora of books and training manuals on the subject, and professional opinions often vary greatly due to the high degree of subjectivity involved. Thus, there is much more to business valuation than pulling a number out of the air or simply applying a subjective multiple to stated historical earnings or revenues.
"Greg is one of the most knowledgeable and talented CPAs in the State of Alabama. His work for my clients has been creative, sound and effective. I do not hesitate to encourage my clients to use his services."
- Fred D., Tax Attorney
If you are buying or selling a business or settling a dispute that a business’ value impacts, it is critical to fully understand business valuation before you agree to binding terms. The process of business valuation involves the coordinated effort of
- analyzing historical financial statements and the transactions within them
- identifying non-business activity within the financial statements
- reviewing/preparing projected financial statements when appropriate
- analyzing industry data, trends and forecasts
- analyzing economic data, trends and forecasts
- assessing numerous and varied risk factors
- determining the most appropriate value standards and valuation methods
- analyzing market transactions where relevant
- formulating professional opinions
There is more to a business valuation than just an educated guess. A business valuator should remain completely objective and free from bias and conflicts of interest in formulating value opinions. In short, he or she analyzes hard facts, makes numerous judgment decisions, and does this with integrity and within the constraints of professional ethical standards. In business valuation, the valuator should tell you the truth based on factual evidence, creating a value that will holdup under scrutiny. A valuator must understand the intricacies and subjectivity of the valuation process and posses seasoned judgment. Valuing a business is as much an art as it is a science. If you are asking the question, “What is my business worth?” You want a valuation expert calculating the answer when that answer really matters.
"I have come to have the utmost respect for Greg as a man of commitment and fidelity. His ethical standards are inviolable, yet I sense a great capacity for compassion in interpersonal relationships."
- Stanton I., Investment Broker
Reagan FVL business valuation professionals are credentialed and highly experienced in a wide range of industries, and possess the capability to assist with valuation consulting where disputes exist and expert witness trial or mediation/arbitration testimony is needed.
Reagan believes, “As fact-finders, we unearth the reality behind the numbers in order to determine real value.”
Our business valuation services include:
- Valuations in Various Litigation Matters
- Family Law and Matrimonial Dissolutions
- Shareholder Oppression and Dissenting Shareholder Litigation
- Intangible Assets and Intellectual Property Valuation, including Trade Secret, Trade Name and Trademark Valuation
- Bankruptcy and Reorganization
- Mergers, Sales, and Acquisitions
- Buy/Sell Agreements
- Succession & Transition Planning
- Purchase Price Allocations
- Gift and Estate Tax Valuation
- “S” Election Income Tax Valuation
- Goodwill Impairment Testing
Our business valuation reports meet all applicable professional standards of:
- American Institute of Certified Public Accountants
- National Association of Certified Valuators and Analysts
- The Appraisal Foundation and the Uniform Standards of Professional Appraisal Practice
- Internal Revenue Service