WHAT SHOULD A FORMAL REPORT CONTAIN
If you are selling your business or you are acquiring one:
A potential buyer or seller of a company needs objective and independent
opinion of what a business is worth before making buying or selling
commitment and before investing time and money in negotiating the
transaction.
When buying or selling a business, a professional independent valuation
report will add value supporting the transaction and your side of
the negotiation.
The typical business valuation could include the following elements:
- A combination of using your existing business material and interviews
with you to understand your business, products and services.
- The reconstruction of the last three years of income and expenses
to establish the business’s true cash flow.
- Valuation of the business based on the capitalization of net
earnings approach and market comparison to other similar businesses.
- Preparation of a comprehensive written Business Valuation Report
which includes:
- Company General Description
- History, current ownership, location, organization
- Business Activities
- Nature of the Business, Customers, Products, Services, Competition,
Key Personnel, Company Facilities, Litigation
- Industry overview
- Historic Financial Records
- Forecast of Sales and Profits
- 3 to 5 year Reconstructed Income Statements
- Valuation Rationale
- Conclusions
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