The Market Approach to Valuing Businesses

Pirmais vāks
John Wiley & Sons, 2006. gada 22. febr. - 400 lappuses
Your Best Approach to Determining Value

If you're buying, selling, or valuing a business, how can you determine its true value? By basing it on present market conditions and sales of similar businesses. The market approach is the premier way to determine the value of a business or partnership. With convincing evidence of value for both buyers and sellers, it can end stalemates and get deals closed. Acclaimed for its empirical basis and objectivity, this approach is the model most favored by the IRS and the United States Tax Court-as long as it's properly implemented.

Shannon Pratt's The Market Approach to Valuing Businesses, Second Edition provides a wealth of proven guidelines and resources for effective market approach implementation. You'll find information on valuing and its applications, case studies on small and midsize businesses, and a detailed analysis of the latest market approach developments, as well as:

  • A critique of US acquisitions over the last twenty-five years
  • An analysis of the effect of size on value
  • Common errors in applying the market approach
  • Court reactions to the market approach and information to help you avoid being blindsided by a litigation opponent

Must reading for anyone who owns or holds a partial interest in a small or large business or a professional practice, as well as for CPAs consulting on valuations, appraisers, corporate development officers, intermediaries, and venture capitalists, The Market Approach to Valuing Businesses will show you how to successfully reach a fair agreement-one that will satisfy both buyers and sellers and stand up to scrutiny by courts and the IRS.

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Saturs

Part II Finding and Analyzing Comparative Market Transaction Data
51
Part III Compiling Market Value Tables and Reaching a Value Conclusion
121
Part IV Sample Market Approach Cases
167
Part V Important Aspects of Using the Market Approach
239
Appendixes
297
Index
377
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Populāri fragmenti

xxxii. lappuse - ... in addition to all other factors, the value of stock or securities of corporations engaged in the same or a similar line of business which are listed on an exchange.
xxxii. lappuse - The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.
284. lappuse - However, a sale, exchange, or other transfer of property made in the ordinary course of business (a transaction which is bona fide, at arm's length, and free from any donative intent), will be considered as made for an adequate and full consideration in money or money's worth.
249. lappuse - Because valuations cannot be made on the basis of a prescribed formula, there is no means whereby the various applicable factors in a particular case can be assigned mathematical weights in deriving the fair market value. For this reason, no useful purpose is served by taking an average of several factors (for example, book value, capitalized earnings, and capitalized dividends) and basing the valuation on the result.
313. lappuse - ... checks, money orders, or similar instruments, any broker or dealer in securities registered or required to be registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934...
xxxii. lappuse - In accordance with section 2031 (b) of the Code stocks listed on an exchange are to be considered first. However, if sufficient comparable companies whose stocks are listed on an exchange cannot be found, other comparable companies which have stocks actively traded in on the over-the-counter market also may be used. The essential factor is that whether the stocks are sold on an exchange or over-the-counter there is evidence of an active free public market for the stock as of the valuation date. In...
334. lappuse - Income (income-based) approach A general way of determining a value indication of a business, business ownership interest, security, or intangible asset using one or more methods that convert anticipated economic benefits into a present single amount. Intangible assets Nonphysical assets such as franchises, trademarks, patents, copyrights, goodwill, equities, mineral rights, securities and contracts (as distinguished from physical assets) that grant rights and privileges, and have value for the owner.
xxxii. lappuse - When a stock is closely held, is traded infrequently, or is traded in an erratic market, some other measure of value must be used. In many instances, the next best measure may be found in the prices at which the stocks of companies engaged in the same or a similar line of business are selling in a free and open market.
333. lappuse - ... approach. Appraisal date See Valuation date. Appraisal method See Valuation method. Appraisal procedure See Valuation procedure. Arbitrage pricing theory A multivariate model for estimating the cost of equity capital, which incorporates several systematic risk factors. Asset (asset-based) approach A general way of determining a value indication of a business...

Par autoru (2006)

Shannon P. Pratt, CFA, FASA, MCBA, CM&AA, is the Chairman and CEO of Shannon Pratt Valuations, Inc. a premier business valuation firm located in Portland Oregon, and is the founder and Editor Emeritus of Business Valuation Resources, LLC. Over a distinguished career of close to four decades, he has performed valuation engagements for M&A, ESOPs, gift and estate taxation, marital dissolution, shareholder oppression and dissent, and numerous other purposes. He has conducted numerous fairness and solvency opinions, has testified in a wide variety of federal and state courts across the country, and frequently participates in arbitration and mediation proceedings. Dr. Pratt is one of the most successful and respected authors in his field. He is the author or coauthor of several industry standards, including Valuing a Business: The Analysis and Appraisal of Closely Held Companies, Valuing Small Businesses and Professional Practices, The Market Approach to Valuing Businesses, Standards of Value, Business Valuation and Taxes, The Lawyer's Business Valuation Handbook, and Cost of Capital.

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