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The specific role of a business valuation professional is to determine
the value of tangible and intangible assets held by businesses and
individuals. A business valuation professional can assist you in your
financial, legal, business, family or personal reasons. We have
experience in accounting, tax, finance, economics, litigation support,
valuation theory and its application.
We provide valuation professional services in the following areas:
Business Transactions:
· Buy/Sell Agreements
· Mergers and Acquisitions
· Fairness Opinions
· Finance
· Bankruptcy and Reorganization
· Initial Public Offerings (IPOs)
· Franchise Valuation of a Business
· Sale/Purchase of a Business
· Split-ups/Spin-offs
· Succession Planning
Management Support:
· Business Plans
· Strategic and Market Analysis
· Lease versus Buy Analysis
· Incentive Stock Options
· Performance Measurement
Tax Planning:
· Adequacy of Life Insurance
· Allocation of Acquisition Price
· Charitable Contributions
· Employee Stock Ownership Plans (ESOPs)
· Gift and Estate Tax Planning
· Executive Compensation
· Gifting Programs
Litigation Support:
· Disruption of a Business
· Dissenting Shareholder Actions
· Family Law
· Economic Loss Analysis
· Minority Oppression/Partner Disputes
Independent and Objective Analysis:
Independence is one of the primary reasons for engaging a
business valuation professional. Problems involving a lack of
independence, fairness, competence, and disputes among
interested parties may be avoided through third-party objectivity.
The goal of the business valuation professional is to provide you
with an independent, knowledgeable, credible valuation without
personal or emotional issues influencing the analysis and
conclusions.
Professional Quality and Standards:
We have earned accreditation through professional organizations
such as the National Association of Certified Valuation Analysts
(NACVA) and the American Institute of Certified Public Accountants
(AICPA). Persons earning these credentials have completed
in-depth and advanced training necessary to competently provide a
wide range of business valuation services, using recognized
industry standards.
Understanding How Value Is Determined:
As business valuation professionals, we have been trained to
identify and determine the most appropriate standard of value for
the valuation engagement. A specific standard of value will be
selected depending on the specific purpose for the valuation.
Benefits Offered by the Business Valuation professional:
Business valuation professionals provide many intangible benefits
to their clients. Some of the benefits provided include:
· Determination of Value – Selecting the most appropriate
approach to determine value based on the purpose of the
business valuation engagement.
· Professional Affiliations – Many reputable business valuation
professionals are members of professional organizations.
· Confidentiality – Engaging business valuation services assures
that the details of your business remain confidential.
· Litigation Support – Minimizing the potential risk of litigation is a primary objective. In the event litigation is unavoidable, the valuation professional can assets as an expert witness or recommend another qualified expert.
· Specialized Training and Certification – Business valuation
services are provided by professionals who are specifically trained
through specialized educational programs, including those provided
by NACVA and the AICPA.
· Third-Party Objectivity – Avoiding problems that can arise from
questions of independence and objectivity is critical to ensuring a
credible valuation. Compliance with Standards of Professional
Practice provides assurance that the business valuation
professional will treat your engagement consistently and without
bias.
Gift and Estate Tax Planning
Gift and estate tax issues are becoming more complex. Wealth attained through business operations, transfers, and inheritance invariable results in tax liabilities. This issue is compounded with gifting of closely held stock, family limited partnerships, or charitable contributions. A credible valuation can minimize taxes and reduce the potential for IRS audits or other legal disputes
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Employee Stock Ownership Plans (ESOPs)
Tax law changes require some businesses to undertake a business valuation. The Tax Reform Act of 1986 requires that a qualified independent business valuation professional provide a stock valuation upon the formation of an Employee Stock Ownership Plan (ESOP), and each year thereafter. The valuation must reflect consideration of the treatment of leverage, control premium, minority interest considerations and repurchase liabilities. Conforming to the Employee Retirement Income Security Act (ERISA) and Department of Labor (DOL) regulations, along with other industry standards, is required. The complexity of these issues suggests you need a business valuation professional with the expertise to analyze the information and comply with all of the regulations.
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Allocation of Acquisition Price
The Revenue of Reconciliation Act of 1993 established additional benefits through proper allocation of the purchase price to personal, real and intangible property. Fair market valuations are required on various purchased properties in certain asset and stock acquisitions. At times, it may be advantageous to allocate the purchase price among various legal entities as part of the lump-sum purchase transaction.
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Buy/Sell Agreements
The prudent rule prior to entering a business is to establish a formal agreement for getting out of the business relationship. Buy and sell agreements allow the business owner to transfer an interest in the business to there owners or to the business itself. The agreement can guarantee a buyer for the business and eliminate difficulties associated with transferring the business upon death or disability of one or more of the owners. Conflicts among interested parties to the business may be minimized by clearly establishing the definition of market value prior to the time of need.
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Fairness Opinions
Providing a fairness opinion minimizes exposure by meeting the Business Judgment Rule. Due diligence reports, or fairness opinions, are required by the Securities and Exchange Commission (SEC) in transactions involving public stock offerings. Boards of directors will ask for a fairness opinion to comply with their fiduciary duty to shareholders by providing outside, third party objectivity. Fairness opinions are also called for in mergers/acquisitions, determination of controlling versus non-controlling interests, and when fairness may be questioned by interested parties to a transaction.
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Finance
Valuation needs frequently arise when attempting to secure financing or when renegotiating a current existing obligation. Business valuations include a determination of the value of tangible assets and intangible assets. Tangible assets may include buildings, land, equipment, inventory or receivables. Intangibles may include goodwill, customer lists, trademarks, non-compete agreements, patents or leaseholds, to name a few. Determining the market value of the company’s capital assets will help determine the ability of the business to cover its current obligations and/or projected future debt.
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Bankruptcy and Reorganization
When considering bankruptcy or reorganization, the primary question is whether the company is worth more as a going concern or worth more in liquidation. Consideration must be given as to the best and most valuable use of the firm’s assets. One of the most challenging aspects is determining the value of the intangible assets. Analyzing the firm in a variety of operating scenarios will assist you in structuring the most appropriate reorganization or liquidation plan.
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Family Law
Marital dissolution is a major force in determining the need for a business valuation. Many cases involving divorce will require a business valuation for each marital partner. Determining an accurate assessment of value may minimize the need for litigation. If litigation is required, a variety of valuation issues must be considered. Issues include intrinsic value versus fair value, personal goodwill, fair and reasonable owner’s salary, discounts and premiums for minority versus control positions, and lack of marketability to sell the business.
We perform the following types of forensic accounting services:
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1. | Tracing of Assets |
| 2. | Business Valuation |
| 3. | Asset Division |
| 4. | Determination of Asset Status - Community versus Separate Property |
| 5. | Calculating Income Available for Support |
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Business Plans
Business valuation professionals provide valuable assistance in developing a comprehensive business plan for new and well-established businesses. Expert financial analysis allows company managers to confidently focus on their business goals and be responsive to new opportunities and change. Business valuation professionals may also be helpful in reviewing and assessing business plans of companies that offer an investment or partnership opportunity. Prospective investors may gain further perspective and insight as to the value of the business opportunity.
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Strategic and Market Analysis
Detailed market analysis will help the business owner or management better focus marketing resources. Making solid strategic decisions for the future will help ensure the long-term viability of the business enterprise. Advanced analysis and forecasting of market supply and demand, production capacity, market share and competitive pricing will assist management in organizing and interpreting data leading to a solid business plan of action. Decisions regarding expansion, locations, split-ups/spin-offs of business units or new business unit creation will be simplified through strategic analysis by the business valuation professional. Determining depth and breadth of existing management can facilitate increased operational efficiencies and leverage existing management resources.
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