articles

Murray

What is the Reliability Score?

The Reliability Score (August 31, 2017)

If we could see the future, and know exactly what your business’s future sales, profitability, and selling price would be, we could calculate its true value to you today with terrific precision. Unfortunately we cannot.

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Modeling Operating Income from Historical Data

The Operating Income (January 14, 2018)

Can historical data be used to develop the optimal model of operating income?

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Is There a Better Method of Forecasting Sales?

Is There a Better Method of Forecasting Sales? (November 19, 2017)

In our relentless mission to offer the best business valuation possible, we paused to ask ourselves a critical question: “Can we identify a method of forecasting sales that is statistically more accurate than other methods?”

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What to Look For in a Business Valuation

What to Look For in a Business Valuation(October 2, 2012)

It is essential that your valuation expert has significant experience in business purchase and sale transactions. No amount of study can replace real world experience. We have been valuing companies and consulting with buyers and sellers through the negotiation process for more than fifteen years.

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How to Spot a Bad Business Valuation

How to Spot a Bad Business Valuation (September 15, 2016)

Credentialing bodies such as the AICPA, the ASA, and the NACVA have done much in recent years to improve and standardize appropriate valuation practices, yet there are many report writers still using outdated or questionable methodology.

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Business Valuation in Divorce

Expert Witness or Hired Gun? (December 6, 2013)

Suppose for a moment you’re an attorney serving a client in a contested divorce. Included in the marital property is a very profitable consulting firm. Your client is the primary operator of the business, and wishes to own it exclusively after the divorce. The spouse has no interest in owning the business after the divorce. Is it in your client’s best interest to obtain the lowest valuation of that business you can get?

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The Importance of Adjusting for Capital Structure

August 31, 2016

One of the most common errors made in small company business valuation reports in the Income Approach is failing properly adjust for capital structure. In the following case, accounting for working capital and capital structure result in huge value adjustments.

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The Best Comparable Transaction Analysis

Selecting Comparable Companies/Transactions (November 2, 2012)

Many appraisers prefer the guideline company method because of the quantity and quality of data available about the selected company or companies. Some appraisers will review hundreds of companies searching for the one most comparable to the subject company.

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Your Business's Genetic Code

The Impact of Industry Classification on Valuation (August 31, 2016)

Sometimes identifying your subject company’s specific industry and industry code is simple; often it is not. Carelessness in this step can have a significant impact on your conclusion of value.

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How to Use Earnings Multiples

August 17, 2014

Earnings multiples and so called rules of thumb have been around as long or longer than the practice of business valuation itself. One of the key approaches to estimating the value of a business is the Income Approach, which is based on the present value of future expected earnings

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Why is it Important to Factor Out Real Estate?

August 8, 2014

First, let’s limit this discussion to companies whose ownership or use of real estate is incidental to their business activity, not companies for whom real estate ownership is central to their business activity, such as a developer or real estate holding company.

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Are Experts Tax Affecting the Wrong Earnings?

October 2, 2012

NYU professor and noted valuation authority Aswath Damodaran posted a blog article (The dividend 'tax cliff' approaches: Implications for stocks) about the potential devaluation of dividend paying stocks if the preferred dividend tax rate were to climb back up to the ordinary rate.

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Lessons from the Deal Stats Database

October 21, 2018

When we developed mycompanyvalue.com, we wanted all of the valuation methodologies applied to be proven the best by data testing.

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