TYPES OF VALUATION REPORTS

We will develop a Formal Valuation Report to meet your specific needs. Our most common reports are as follows

Snapshot Report

Recommended use: Small business sale or purchase

Turnaround: Typically 5 business days.

Cost: $350-$500

Scope: This is a very short report, designed to give a quick, but reasonably accurate fix on the amount a financial buyer could afford to pay for the subject business. The report relies on the subject company's most recent year of financial history, and the owner's projection for the next year. The data is extrapolated for five years, and the annual cash flow is calculated. If the business is being sold, the value of the business is computed so that the prospective buyer can realize a reasonable rate of return on his investment, and have a reasonable margin of safety during the purchase-financing period. It is assumed that the business is purchased under normal financing terms. Our years of experience working with mergers and acquisitions people and with business brokers tells us that this is how small to mid-sized businesses are really bought and sold. This is a basic valuation, it will give you a good idea of your smaller business’s value, it is not a formal report and it will not hold up in court.

Short Report

Recommended use: Small business sale or purchase requiring more detailed report.

Turnaround: Typically 10 business days.

Cost: Please contact our office.

Scope: This valuation includes some of the elements of our intermediate report, it gives you the options to include multipliers, private comps, public comps, to support its conclusions. It is still very affordable.

Intermediate Report

Recommended use: It is suitable for businesses up to three million in sales. It will serve most situations requiring a formal report.

Turnaround time: Typically 3 weeks.

Cost: Please contact our office.

Scope: This report includes the elements to satisfy the needs of most situations. It covers the essential steps necessary to develop a good valuation and includes the necessary details. It is less comprehensive than a Formal and Complete Report; you have the option of including additional components. It covers the following:
Our consultant will conduct the initial interview, he/she will determine the scope and cost of the valuation.
Our consultant(s) will interview the business owner or a designated contact to gather business and financial information to understand and reconstruct the company’s financial statements.
Preparation of reconstructed financial statements of the last three years. This will result in establishing the real net cash flow of the business. The resulting available net is usually higher than the company’s P&L statement shows, which are usually prepared primarily to minimize the business’s tax obligations.
Projections of the company’s future earnings, by estimating based on past history and your business expectations.
The business is analyzed and various valuation approaches are used to establish supportable economic values of the business based on the business’s expected EBITDA (Earnings before interest, taxes, depreciation and amortization) and assets.
The valuation report is prepared according to the package and activities you selected. Brief supporting analysis, documentation and the conclusions are part of your report. This report is usually submitted to you via Federal Express.

Complete Report

Scope and Recommended use: Suitable for a business of any size, it will satisfy the needs of any situation. This is a formal and complete valuation, we will thoroughly study all aspects of your business and the industry, analyze your financials and compare them to your peer companies. The Valuation Report could be 50 to 500 pages or more. This is a comprehensive report with full supporting documents and narratives. Depending on the extent of work to be done this project can usually be completed within one to three months. The valuation process consist of the following general steps:

1. Needs assessment: We will establish at no charge your overall needs, the type of valuation you require, financial and business information you readily have available. This is usually done on the phone or in person
2. Agreement: You will be provided information on our services, requirements, the time needed to complete the project. Client will be provided an engagement agreement that defines the scope of the work to be done, the fees and the timeline. NBR will start working on the project when the client’s signs Valuation Engagement Agreement and the retainer fee is received.
3. Formal Data Gathering: No matter how familiar we may be in your industry, you know your company and the industry the best. We will gathers from you, information and facts relevant for preparing a thorough valuation. We will also obtain additional data we deem necessary for more accurate assessments for our own library, industry sources, government sources, and information from the acquisition and sales of similarly businesses. We also have to assess capitalization rates, risks, returns of recent trends in your industry. The data gathering will include in-person and telephone interviews with the management of the company. These discussions will include company’s current and future operations.
4. Financial Statements Analysis: We will analyze your financial statements and hold discussions with your in house accountant and CPA if applicable.
5. Additional Data Gathering and Research: Depending on the size and complexity of your business and the purpose of the valuation report, we will research required public and private databases to support our valuation.
6. Performing The Valuation: NBR will consolidate and analyze financial and other gathered data, and develop the appropriate valuation strategy that can best reflect the value of your company. This includes developing capitalization rate, and appropriate valuation methods. Analyze and assess various valuation results.
7. Formal Report Preparation: The report is prepared to address the needs of the client. It will include an explanation of the appraisal process followed, the source of the information gathered, any investigation made, how the capitalization rate was developed, valuation approaches used, factors used to adjust values, and rationale used to arrive at the conclusions.
8. Submission of the report to the Client: NBR will ordinarily ship the report to the client via Federal Express for review and acceptance. In more complex appraisals the fee paid provisions for an in-person presentation to highlight and explain various aspects of the report and respond to client’s questions.