Do Your Own Business Valuation Part 3

Information about Do Your Own Business Valuation Part 3

Published on December 9, 2009

Author: decoffman



Do Your Own Business Valuation - Part 3: Do Your Own Business Valuation Series Designed to Help Small Business Owners Do Their Own Business Valuation Part 3 Instructor: Instructor David E. Coffman CPA/ABV/CFF, CVA Accredited & Certified in Business Valuation – ABV & CVA Has Valued Hundreds of Small Businesses President & CEO of: Business Valuations & Strategies PC, Harrisburg, PA Business Advisors Group PC, Seaside Park , NJ Email: [email protected] Part 3 - Quantifying Business Returns: Part 3Quantifying Business Returns Basic Concept of Business Value: Basic Concept of Business Value Business Value = Returns ÷ Risks Returns quantified using Sales Earnings Risks quantified using Multiples Rates Benefits of Ownership: Benefits of Ownership Non-financial Difficult to quantify Financial Focus of valuation Earning capacity Earning Capacity: Earning Capacity No earning capacity Value from tangible assets Components Cash flow is preferred measure After deducting adequate owner compensation Historical trend Past vs. Future Performance: Past vs. Future Performance Future Fits valuation theory better Not practical Less reliable Past More reliable Can be adjusted Easier to justify Conclusion: Conclusion Expected future returns Key component of business value Quantified based on earning capacity NEXT – Part 4: Quantifying Business Risks For More Information About: Doing Your Own Business Valuation – Getting a Low-Cost Business Valuation –

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