Business Valuation Uses

Business valuations are critical for businesses of any size–and not just when a business is being bought or sold according to recent articles in Inc. and Entrepreneur magazines.   Some common uses of valuations include:

  • Determining the price to buy, sell or merge a business.
  • An annual reality check of your business performance.
  • A tool for aligning employee goals and business improvement.
  • Adding new shareholders, setting prices for new stock purchases or buying back shares from existing shareholders.
  • Calculating business owner personal net worth for estate tax liability and planning, insurance, financial planning.
  • Obtaining and maintaining financing.
  • Employee stock ownership plans.
  • Stock option and other incentive plans.
  • Research into feasibility of management or other leveraged buyouts.
  • Divorce proceedings of shareholders.
  • Litigation support.
  • Mediation and arbitration of disputes (e.g. between shareholders/business partners).
  • Valuation of business spin-offs.
  • Bankruptcy, liquidation or reorganizations.
  • Exit strategy.
  • Conducting due diligence.

If you have any questions regarding the utilization of business valuation in the management of your business, contact Michael Bromelkamp, CPA, ABV, MBA, CIA, CITP to discuss how a valuation could benefit your business.

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DISCLAIMER: This blog is provided for informational purposes only and is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant. Presentation of the information in this article does not create nor constitute an accountant-client relationship. While we use reasonable efforts to furnish accurate and up-to-date information, the evolving landscape surrounding these topics is supported by regulations or guidance that are subject to change.

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