Why is the Date of Valuation Important?

In fact, in our experience, it seldom is. But when there are unusual circumstances, the date of valuation can be as critical as the Standard of Value imposed.

From time to time we see a case where the managing spouse has taken covert or overt steps to adversely affect the value of the community-owned business. The dentist, for example who reduces his case-load voluntarily, or the contractor who delays signing contracts until after the trial to divide the community. Other times, we see the case discussed by the Court in Duncan, where the value of the business increases owing to the efforts of the managing spouse. In these fairly rare circumstances, the value of the company can vary substantially between separation and trial.

As a practical matter, it is a good idea to have your appraisal expert value the company at both dates of valuation, especially where the date of value has not been decided in advance.Why is the Date of Valuation Important?

In fact, in our experience, it seldom is. But when there are unusual circumstances, the date of valuation can be as critical as the Standard of Value imposed.

From time to time we see a case where the managing spouse has taken covert or overt steps to adversely affect the value of the community-owned business. The dentist, for example who reduces his case-load voluntarily, or the contractor who delays signing contracts until after the trial to divide the community. Other times, we see the case discussed by the Court in Duncan, where the value of the business increases owing to the efforts of the managing spouse. In these fairly rare circumstances, the value of the company can vary substantially between separation and trial.

As a practical matter, it is a good idea to have your appraisal expert value the company at both dates of valuation, especially where the date of value has not been decided in advance.

Why do a biz valuation

Why Do A Business Valuation?

By Leonard Holler, Wyoming Entrepreneur – Small Business Development Center Regional Director and Certified Valuation Analyst.

Gil in Cody, Wyoming asks, “Why would a small business owner, like myself, need a valuation done? I am not trying to sell my business.”

At first it might seem that the only reason for a business valuation is for no more than the casual interest of a business owner. The fact is that there are as many kinds and varieties of values as there are reasons for valuing a business.

In some recent articles in Inc. magazine and Entrepreneur magazine, they conclude that business valuations are important for businesses of ANY size – and not just when a business is being bought or sold. Inc. magazine stated – “A business's success is ultimately measured by a business's value…. Knowing your net worth as a private business owner provides a useful snapshot of where your company stands, what options it has, and how it can improve in the long term." In short, business valuations are a significant planning tool for small and large businesses alike.

They are used in various business situations and can be impacted by any number of circumstances. Some of the common uses of business valuations include –

• Determining the price to buy, sell or merge a business.
• A reality check of your business performance.
• A tool for developing employee and business improvement goals.
• Setting prices for adding new shareholders, new stock purchases or buying back shares from existing shareholders.
• Helping determine the business owner’s personal net worth for estate planning, insurance requirements and financial planning.
• Obtaining or even maintaining financing options.
• Employee stock ownership plans (valuations are required by ERISA).
• Stock bonuses or other compensation incentive plans.
• Going public and IPO research.
• Feasibility of management or leveraged buyouts.
• Divorce proceedings of owners and shareholders.
• Various litigation support documentation.
• Mediation and arbitration of disputes between shareholders or business partners.
• Value of business spin-offs.
• Bankruptcy, business liquidation or reorganization decisions.
• Exit strategy planning and development.
• Conducting due diligence on mergers or acquisitions.

Business owners also need to periodically evaluate their own performance. Financial ratio analysis and business valuations can help them objectively determine their management effectiveness. This is not the only measurement of how well a business is operating, but can give you reason to ask more questions about how you operate your business.

- See more at: http://wyomingentrepreneur.typepad.com/blog/2010/03/why-do-a-business-valuation.html#sthash.WpYfMPOA.dpuf

Valuation Key to M & A

It has been a few years since the last big wave of mergers and acquisitions, but as baby boomers approach retirement, the M&A arena likely will heat up again. Valuation services are essential for both buyers and sellers in the M&A process, and valuation experts are critical to the success of a buyer’s or seller’s advisory team.

On the Selling Side

Business owners – particularly those who founded the business – often have an unrealistic idea of the company’s value to a buyer. Sometimes it’s just false hope or an inflated ego that clouds the owner’s vision. More often, however, owners have a number in their head that they believe the company is worth, but can’t support that number with data.

For this reason, it’s a good idea to have a business valuation performed early in the sale process. This will give the owner a range of realistic values to pursue, based on comparable companies and multiples of EBITDA, sales, book value or other relevant data. If the range is unacceptably low to the owner, it will also give him or her time to make adjustments in the company, increase earnings or address other problems before sale.

Valuation experts also assist business owners in several other areas before and during the sale process:

Confidential Offering Memorandum: The confidential offering memorandum is a formal offer to sell the business. It presents an overview of the company and its management, historical data from audited or reviewed financial statements, and other information of interest, customized for potential buyers.

A business valuation professional plays an important role in the preparation of this document. The valuation expert is tuned into the synergies the business has with each potential buyer and can tweak the overall presentation of the company’s strengths to align them with the needs of targeted buyers.

Data Room Set-Up and Due Diligence Response: As potential buyers respond to the confidential offering memorandum, the valuation expert should be considered as the gatekeeper for the due diligence team. He or she often sets up and monitors the “data room,” or online repository of information, as it is made available to buyers.

The valuation expert also plays a role in crafting due diligence responses. His or her input can help sellers avoid problems by revealing too much, saying too little or using language in a way that may have unexpected consequences.

Purchase and Sale Agreement: The design of this legal agreement requires the input of the business valuation expert. He or she can:

• help draft wording that defines the purchase price,
• provide detail for calculations,
• give examples to illuminate the interpretation of legal terms, and
• ensure that the agreement is in conformance with the client’s accounting procedures and policies.

On the Buying Side

A valuation professional is also an integral part of the buyer’s advisory team. For example, a valuation expert has knowledge of the necessary financial information to draft the letter of intent to buy a business. He or she is also involved in determining fair market value, the synergies expected and the purchase price for the target business.

In the due diligence phase, a valuation expert can help the buyer by reviewing the initial valuation and the details of the confidential offering memorandum. Valuation professionals are also involved in drafting the purchase agreement and translating legal terms into workable examples.

When putting together an advisory team for mergers and acquisitions, choose a valuation expert who knows your business and industry. Given his or her knowledge, the business valuation expert can help ensure that you make the most of the purchase or sale.

MATERI PENDIDIKAN DASAR PENILAIAN I BISNIS

MATERI PENDIDIKAN DASAR PENILAIAN I BISNIS :
 Laba Rugi, Neraca, Arus Kas
 Analisis Perbandingan, Time Series Trens dan Common Size, Dupont
 Modal Kerja
 Manajemen Keuangan I
 Pengetahuan tentang Perpajakan di Indonesia
 Pengenalan Pasar Modal
 Pengantar Ekonomi Mikro dan Makro
 Pengenalan Jenis Saham