Business Valuation / Appraisal Services
Ready to get started with process of valuing a business in Tucson? Just complete the form below and one of our experienced business brokers will contact you shortly to answer your questions and begin the process! Or keep reading to learn more.
Business valuation (also referred to as business appraisal) is a process and a set of procedures used to estimate the economic value of an owner’s interest in a business as of a specific date. Valuation is used by financial market participants to determine the price they are willing to pay or receive to consummate a sale of a business
Allen & Young Business Brokerage has deep experience performing business valuations for those wishing to buy or sell a business in Tucson and Southern Arizona, or participate in a Tucson Business Investment.
In addition to estimating the selling price of a business, the same valuation tools are often used by business appraisers to resolve disputes related to bankruptcy, divorce litigation, allocate business purchase price among business assets, establish a value for a parter buy-in or buy-out, establish a formula for estimating the value of partners’ future ownership interest for buy-sell agreements, and many other business and legal purposes.
What is Value?
The word “Value” by itself is not very helpful. In business appraisal work, a number of different standards of value are often employed depending on the purpose and use of the appraisal. The following standards of value are the most common:
- Book Value: is not really a standard of value at all. It is an accounting concept used to describe the difference between a company’s total assets and total liabilities. Due to the nature of the accounting process, book value would equal the value of a business only by coincidence. Intangible assets are usually not included in book value.
- Fair Market Value: is defined as the price at which a business would change hands between a willing buyer and a willing seller when the former is under no compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts. It is generally also understood that the buyer has the ability to buy and the transaction will be in cash or cash equivalents.
- Fair Value: is the statutory standard of value usually used in court cases involving dissenting shareholders and other similar types of litigation.
- Liquidation Value: is the expected amount that could be obtained from the piecemeal sale of business assets on either an orderly or forced liquidation basis.
- Investment Value: is the value to a specific buyer or investor often based on perceived synergies when the business is combined with another business. This standard of value is often used in merger and acquisitions.
How Does The Process Work?
The Allen & Young business Valuation process consists of three stages, and with your complete and enthusiastic participation can typically be completed within a period of 3-4 weeks.
1) Gather information
- Questionnaire relating to products, services, markets, competition, management, economic effects, growth opportunities, and the facility.
- Financial Information covering 3 to 5 years up to the date of the appraisal.
- Buy sell agreements and operating agreements
- History of the entity
- Asset list as of the date of the appraisal
- Debt list as of the date of the appraisal
- Tax returns
- Equipment list
2) Analyze Information
- Meet with owner
- Visit the facility
3) Produce A Written Report