Key Steps to a Business Valuation
Performing an accurate and reliable business valuation involves following a process and a set of standards. The exact process differs depending on the type of engagement and the degree of analysis needed. Essentially, when a business valuation is requested it is important to determine:
- How well can this business be expected to perform for a new owner in the absence of the existing owner?
- What are the tangible and intangible assets that can be transferred to the new owner to use ensure profitability going forward?
No one valuation method or approach can be 100% definitive. The appropriate methodology is determined by key factors such as:
- What stage of development the business is in currently
- The future prospects of the business
Hence, when it is appropriate, it is common practice to use more than one method to ensure that mutually supporting evidence leads to the same conclusion of value. The business valuation team of experts at Curnow & Curnow, PLLC can help measure the indicative value of a business through examination of income, market, assets, and more.
Call Curnow & Curnow, PLLC, Certified Public Accountants and Consultants today at (360) 676-6655 to engage a professional Washington state CPA in your business valuation efforts.
Financial Statements Used in Business Valuations
At Curnow & Curnow, the starting point for a business valuation is always collecting the relevant information from the latest financial statements. The organization’s accountant should be able to provide these, and they typically include:
- Profit and loss statements
- Statements of cash flow
- Balance sheets
These are examined for information on capital expenditures: revenue, profitability, depreciation and amortization. Because valuation is a forward-looking exercise – even when the business is stable and mature – it is still important to compile projections. Making financial projections can be a subjective exercise because it reflects the best estimate of an uncertain future. However, when it is completed by accounting experts, you are in a better position to make a more accurate estimate.
To schedule an interview and discuss the business valuation services you need from your Washington accounting experts, fill in this form and we’ll give you a call. You can also send an email to email@example.com with your questions.