For companies that need a more formal and detailed Professional Fair Market Valuation one of our valuation professionals will put together a complete and thorough analysis of your company’s Fair Market Value. This formal valuation typically runs 25-75 pages in length and is a valuation based on several different approaches to value. Several different values are arrived at and analyzed to come up with a very accurate narrow value range.

The first approach will analyze the value of “Tangible Assets plus Intangible Assets”. We do not use book value of tangible assets. We will use the fair market value of tangible assets. The intangible assets that will be incorporated in the calculation may include goodwill, customer lists, trademarks, copyrights, distribution rights, management team, non-compete agreements, physical location or markets served, special processes, name recognition, years in business, reputation, competition, company and industry trends, desirability of ownership, current supply and demand for similar businesses, purchase terms and deal structure, verifiability of financial information, risk or downside exposure to a buyer, upside potential, allocation of profits (plow back vs. cash cow) barriers to entry, earnings stability, etc.

In a second approach we will look at the “Allocation of Cash Flow” to ascertain how much debt the company can support while providing a suitable return to a buyer. This method does not take into consideration the value of tangible assets, but essentially measures the loan value of the business, by determining the debt capacity (ability to pay back debt) based on a prudent payment budget from the pre-tax net profit. The difference between the “loan value” and “total value” is the “owner’s equity”, which must be replaced by the purchaser. While this approach is generally the most conservative value indicator, it is favored by bankers and buyers, so therefore, is relative to fair market value.

As another highly technical approach we will perform an “Iteration Optimization Analysis” to ascertain value based on the best win-win situation for the seller and a typical buyer. Here we will determine value based on various terms, return on investment, current cost of capital, expected growth rates, risk, stock (C and S corp.) vs. asset purchase, and all with non-negative cash flow going forward. From this “optimization scenario” we can determine the value of the company in an ideal win-win transaction.

Lastly, we will look at a “Comparable Approach”. We will research nationwide to analyze and compare companies similar to our client’s that have previously been acquired. We will look back at all reported private and public transactions that have taken place anytime in the past 15 years. We will analyze all of this data and compare like transactions with our client based on both revenue and adjusted earnings or EBITDA. This approach actually provides us two different valuation results.

The fee for this Professional Fair Market Valuation is typically between $15,000 and $18,000.

We can provide other types of valuations including fairness opinions, economic and business analysis, and litigation support, which are priced by the nature, scope, and complexity of the assignment.

Our valuation professionals provide different types of valuations for:

• Tax and Financial Reporting
• Business Combination and Goodwill (FASB #141 and #142) Analysis
• Minority Shares and Fractional Interest Valuations 
• Stock Option Valuation 
• Intangible Asset and Intellectual Property Valuations 
• Employee Stock Ownership Plans (ESOPs) 
• Litigation/Audit Support and Expert Testimony 
• Merger & Acquisition Valuation Advisory