Analysis & Risk Assessment

Privately owned businesses are generally valued on a controlling ownership basis, so subsequent analyses are often made for minority interests, voting rights, equity marketability, ESOP structures, stock options and other matters. Companies facing legal, exit planning or other strategic challenges need to analyze the situation, understand their alternatives and substantiate their positions for tax and management reporting.

In the M&A arena, acquiring companies have to allocate the amount paid to the assets and liabilities acquired according to their Fair Value and then periodically review those values for impairment.  Much of the Fair Value is allocated to “intangible assets,” typically patents, recipes, product designs, or in-process research and development.

You can look to American ValueMetrics for support in these areas, and others.  Our derivative analyses include:

Fairness Opinions
Solvency Opinions
Due Diligence
Quality of Earnings
ESOP Feasibility Studies
Stock Redemption Studies
Free Cash Flow Studies
Tax and Financial Reports
Investment Assessments
Impairment Studies
Divestiture Studies
Operations Analysis

It is the mark of an educated mind to be able to entertain a thought without accepting it.
Aristotle

Articles

By avm February 5, 2016 In
Proposed IRS regulations to eliminate discounts for family limited partnerships (FLPs) are to be released comment, but never seem to arrive.  The Obama Administration proposed changing the law over several annual budget proposals in order to restrict or eliminate valuation discounts on transfers of interests in family-controlled entities. The Administration was not successful in having the...
By avm February 5, 2016 In
Since mid-2012, a steady increase in median revenue from $350,000 to $450,000, led to higher small business sale prices. Overall, this year's small business transaction data is following the trend of the past few years: steady activity along with improving financials. Although total transactions are on pace to fall three percent from peak 2014 levels,...
By avm February 5, 2016 In
INTRODUCTION The valuation process typically does not assess the underlying company accounting policy and procedures. However, it is important for stakeholders to be aware of accounting conventions, and to vet them in any due diligence effort. The following is a discussion of different accounting policies and what risks they might introduce. Accounting guidelines allow companies...
By avm February 5, 2016 In
BUSINESS GOODWILL IN CALIFORNIA FAMILY LAW Three issues must be addressed in valuing business interests for the purposes of property settlements in family law. They are: Personal vs. Institutional Goodwill (Personal and Professional Goodwill are similar in nature – personal applies to all types of companies and professional applies to professional practices (i.e. medical practice,...
By avm February 5, 2016 In
Once a simple concept – reward employees for participating in the growth of a company’s value via stock options – incentive compensation has now become a very complicated area of tax regulation and accounting. At least since the creation of “qualifying stock options” in 1981, the IRS has required that options be priced at or...