Unraveling the Complex Realities of Valuations
The Art and Science of Business Valuation: Key Factors to Consider Determining an accurate business valuation is a complex process that requires careful consideration of multiple factors. At Indiana Equity Brokers, we understand the intricacies involved in valuing a company and the impact it has on mergers and acquisitions (M&A) transactions. Ownership Structure and Employee Stock...Read More
How Does Your Business Compare?
When considering the value of your company, there are basic value drivers. While it is difficult to place a specific value on them, one can take a look and make a “ballpark” judgment on each. How does your company look? Value Driver Low Medium High Business Type Little Demand Some Demand High Demand Business Growth Low Steady High & Steady Market Share Small Steady Growth...Read More
How Does Your Business Compare?
When considering the value of your company, there are basic value drivers. While it is difficult to place a specific value on them, one can take a look and make a “ballpark” judgment on each. How does your company look? Value Driver Low Medium High Business Type Little Demand Some Demand High Demand Business Growth Low Steady High & Steady Market Share Small Steady Growth Large...Read More
Valuing the Business: Some Difficult Issues
Business valuations are almost always difficult and often complex. A valuation is also frequently subject to the judgment of the person conducting it. In addition, the person conducting the valuation must assume that the information furnished to him or her is accurate. Here are some issues that must be considered when arriving at a value for the business: Product Diversity – Firms with just a...Read More
Two Similar Companies ~ Big Difference in Value
Consider two different companies in virtually the same industry. Both companies have an EBITDA of $6 million – but, they have very different valuations. One is valued at five times EBITDA, pricing it at $30 million. The other is valued at seven times EBITDA, making it $42 million. What’s the difference? One can look at the usual checklist for the answer, such as: The Market...Read MoreThree Basic Factors of Earnings
When evaluating businesses for sale, it’s crucial to look beyond the raw earnings numbers and consider several key factors that provide deeper insight into the company’s financial health and future prospects. Here are three critical aspects to examine: 1. Quality of Earnings The quality of earnings measures how accurately the reported earnings reflect the true operational...Read More
