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    Business Valuation
    Business Valuation
    Business Valuation
    Ebook90 pages56 minutes

    Business Valuation

    By David G Komatz

    ()

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    About this ebook

    The value of a business can be arrived at by using objective analysis, but the transaction is finalized at the negotiated price at which the seller is willing to sell and the buyer is willing to buy.

    There are many valuation methods but only two valuation approaches: intrinsic and relative. The intrinsic value of an asset is determined by the cash flows that the asset is expected to generate over its life, while considering the certainty of cash flows. Assets with high and predictable cash flows are worth more than assets with low and volatile cash flows.

    LanguageEnglish
    PublisherDavid G Komatz
    Release dateMay 6, 2019
    ISBN9780463014363
    Business Valuation
    Author

    David G Komatz

    David has been a practicing accountant with extensive experience and is knowledgeable in all areas of accounting and taxation. David graduated with a BS in Accounting from Capella University, an MBA in forensic accounting from Southern New Hampshire University and Master’s Certificate in Criminal Justice from Capella University. He has completed his second full Masters Degree in Organizational Leadership and a second Masters Certificate in HR Management. David is now studying for his Doctoral degree in Global Business and Leadership.In addition to his extensive education and experience, he is also an accomplished writer. He has published over 30 articles on Ezine.com and has completed several consulting manuals. He is also working on completing numerous eBooks which will be published on Smashwords.His online articles can be accessed at this site:http://EzineArticles.com/expert/David_G_Komatz/1543625Please read and review the articles. Let David know if there are other articles you would like for him to write.You can reach David at:845-701-9816accurateacctg@yahoo,com

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      Book preview

      Business Valuation - David G Komatz

      Business Valuation

      David G. Komatz, MBAFAC, PBACC.

      Copyright © 2018 Crossroads Business Publishers

      All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, addressed Attention: Permissions Coordinator, at the address below.

      Crossroads Business Publishers

      2 Garden Dr.

      Monticello, NY 12701

      Printed in the United States of America

      Smashwords Edition, License Notes

      This eBook is licensed for your personal enjoyment only. This eBook may not be re-sold

      or given away to other people. If you would like to share this book with another person,

      please purchase an additional copy for each recipient. If you’re reading this book and did

      not purchase it, or it was not purchased for your use only, then please return to your favorite eBook retailer and purchase your own copy. Thank you for respecting the hard

      work of this author.

      Disclaimer

      The business valuation eBook is designed as self-help tool for independent uses only. All results are hypothetical and for example purposes only. The book is not intended to provide investment advice, or provide a firm business valuation, or replace an independent business appraisal provided by a qualified business valuation professional in your market or area. We strongly recommend you consult professional business advisors including Business Brokers, Business Attorneys, CPA's, Financial Advisors, Certified Business Appraisers, and Tax Advisors before making any financial or investment decisions.

      The material and information contained within are provided to you on an as is basis without any warranties of any kind. In no event shall Crossroads Business Publishers or the author be liable for any direct, indirect, incidental, punitive, or consequential damages of any kind whatsoever with respect to this book, the information contained herein or any results you may obtain by using this guide.

      Chapter 1: Business Valuation

      Valuation Theory

      Valuation models in investment decisions are based upon a perception that markets are inefficient and make mistakes in assessing value and how and when these inefficiencies will be corrected. In an efficient market, the market price is the best estimate of value. The purpose of any valuation model is the justification of the value.

      Business Valuation Basics

      The value of a business can be arrived at by using objective analysis, but the transaction is finalized at the negotiated price at which the seller is willing to sell and the buyer is willing to buy.

      There are many valuation methods but only two valuation approaches: intrinsic and relative. The intrinsic value of an asset is determined by the cash flows that the asset is expected to generate over its life, while considering the certainty of cash flows. Assets with high and predictable cash flows are worth more than assets with low and volatile cash flows.

      In relative valuation, assets are valued by looking at how similar assets are priced by the market and performing a comparative analysis. When you establish the amount you wish to pay for a property, comparison should be made by determining the prices of similar properties in the market.

      Valuation Facts

      Value varies with person, purpose and time. Value has different meanings when it comes to different people, places or time. The price of the business is not equal to the value of the business. Valuation prices are important to determine but depending on the seller and buyer the transaction takes place at negotiated prices.

      Corporate Restructuring

      Restructuring is the act of reorganizing the legal, ownership, operational or other configuration of a company in order to make it more profitable. One of the major aspects of a corporate restructuring is to determine an accurate value of the business.

      Valuation of a company in bankruptcy gives a clear picture of the funds that can be generated from the liquidation. Valuations are increasingly important in many commercial disputes. Before settling on how to manage a dispute, it is a good idea to understand the probability of a successful conclusion.

      Purchase Price Allocation

      The system is used to estimate the fair value as of the date of acquisition to allocate the purchase price to the assets acquired and liabilities incurred. Goodwill is the excess of the cost of an purchased entity, including tangible and intangible assets over the net of the amounts assigned to each asset acquired. Consideration for acquisition is paid for tangible, intangible assets and goodwill. With tangible and intangible

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