As a business owner, you may have considered having a business
valuation conducted for your company. But do you know what is
involved in having your business appraised? Do you know the
benefits of business valuations and do you know how to decipher
valuations?
A business valuation involves estimating the market value of an
ownership interest in a business at a given point in time. This
value includes all the economic benefits derived from a company's
physical assets (trucks, tools, etc.) and intangible assets
(customer list, reputation, trade names, key employees, etc.). A
valuation estimates the price a buyer and seller would negotiate
for a business.
The general thought is all company assets are used to generate
company earnings. If a company is to be valued, all these assets
must be considered. A business valuation is an art and science
where quantitative financial techniques and qualitative analyses of
a business, its industry and economy are performed to determine its
value.
Log in or register for FREE access to this article and other Professional Roofing online content.