Valuations

Category: Valuations

Changing Markets Affect on Valuations

Economics back in January 2021 Back in early 2021 there were certain signs that the economy was going to change in some way, and many predicted this change would not be positive.  Post Pandemic in January 2021 the U.S. Government continued to pour billions of dollars into the economy by printing more money. Economics 101

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Why Valuation Matters

The other day, a client asked why valuation matters. It seems like a lengthy process that is complex and differs in each case. You see, I didn’t respond in an elaborate explanation of the different methods of valuation. Instead, I start off by saying that life is very unpredictable. Have you ever experienced a life-altering

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Selling Your Business

Companies are constantly being bought and sold; so regardless of what position you are in or what industry you service, selling your business is one of those topics you need to know about. It’s a common misconception that the financial persons are overhead, are not valuable, and simply just count the numbers. But over the

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Inconsistent Revenue Streams

When valuing a company, investors look for 3 things: reliable, guaranteed, and steady revenue streams. But what if your business model involves inconsistent revenue streams? Regardless of why your company is experiencing inconsistent revenue streams, it’s important to learn what is happening and how to resolve it. Entrepreneurs (typically from a sales or operational background)

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What is your business worth?

So, you’re considering selling your business… Whether it’s to pursue new opportunities or to get out while you can, you need to start thinking about your business from a valuation standpoint. Even if you don’t intend to sell your business in the near future, building a business to be sellable is a sound strategy. So,

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Business Valuation Purposes

See Also: EBITDA Valuation Valuation Methods Multiple of Earnings Business valuation is the process of determining the economic value of a business or company. It assesses a variety of factors to determine the fair market value in a sale, but there is no one way to verify the worth of a company. Business valuation can

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Valuation Methods

See Also: Financial Ratios Required Rate of Return Internal Rate of Return Method EBITDA Valuation What is a Term Sheet? Adjusted EBITDA Multiple of Earnings Business Valuation Purposes Valuation Methods There are a variety of approaches to valuing a firm and its equity. Two of the most popular approaches are discounted cash flow (DCF) methods

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Adjusted Present Value (APV) Method of Valuation

See Also: Valuation Methods Net Present Value Method Internal Rate of Return Method NPV vs IRR Capitalization Adjusted Present Value (APV) Method of Valuation is the net present value of a project if financed solely by equity (present value of un-leveraged cash flows) plus the present value of all the benefits of financing. Use this

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Operating Leverage

See Also: Homemade Leverage Valuation Methods Financial Ratios Operating Profit Margin Ratio Operating Cycle What Your Banker Wants You to Know Operating Leverage Definition Operating leverage is a measure of the combination of fixed costs and variable costs in a company’s cost structure. A company with high fixed costs and low variable costs has high

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Mergers and Acquisitions (M&A)

See Also: Make-or-Buy Business Decision Company Life Cycle Company Valuation Return on Equity Financial Ratios Joint Venture (JV) Accretion Mergers and Acquisitions Basics Mergers and acquisitions (M&A) refer to the buying, selling, and combining of companies. In an M&A deal, two companies become one. M&A deals are typically facilitated by investment bankers. Before going through

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Liquidation Valuation

See Also: Bankruptcy Information Chapter 11 Bankruptcy Bankruptcy Chapter 12 Chapter 13 Bankruptcy Chapter 7 Bankruptcy Bankruptcy Costs How to Make Dramatic Changes in Business Bankruptcy Courts Liquidation Valuation Definition Liquidation valuation is the value of a company that is bankrupt or going out of business. It is the value of the company’s assets, according

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Enterprise Value (EV)

See Also: EBITDA Definition EBITDA Valuation Adjusted Present Value (APV) Method of Valuation Company Valuation Introduction Valuation Methods Enterprise Value (EV) Definition Enterprise Value is simply the total market value of the firm which includes the value of all equity holders as well as debt holders. The EV method is often considered a better measurement

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