Market Approach—The market approach derives an indication of value by comparing the company to other similar companies that have been sold in the past. The “guideline publicly traded company method” uses the prices of similar and relevant public companies as guidelines for determining the value of a closely held or family controlled business. The “direct … Continue reading How To Value A Business: Market Approach
Valuation Insights & Articles
Welcome to Valuation Insights & Articles, where Highland Global shares thought leadership, expert guidance, and commentary on the ever-evolving world of business valuation. Here, you’ll find practical insights tailored for SBA lenders, business owners, attorneys, and financial professionals. Topics include SBA 7(a) valuation standards, goodwill analysis, tax-related valuation, M&A strategy, litigation support, and valuation methodology best practices. Stay informed with clear, actionable content rooted in real-world experience and regulatory knowledge.
How To Value A Business: Income Approach
Income Approach—The Income Approach derives an indication of value based on the sum of the present value of expected economic benefits associated with the company. Under the Income Approach, the appraiser may select a multi-period discounted future income method or a single period capitalization method. The capitalization method estimates the fair market value of a … Continue reading How To Value A Business: Income Approach
How To Value A Business: Part 3
There are various approaches for business appraisers to utilize in determining the value of a business. Each approach has various methodologies that can be employed to determine the value of a business. The appraiser must then select the appropriate approaches and methods to apply to the company’s specific conditions to arrive at an indication of … Continue reading How To Value A Business: Part 3
How To Value A Business: Part 2
Under the fair market value standard, the hypothetical buyer is assumed to be a purely financial buyer seeking a return on the investment. The “financial buyer” lacks synergies or strategic benefits associated with the transaction. As a result, the fair market value estimate is typically lower than the “strategic value” estimate, which is based upon … Continue reading How To Value A Business: Part 2
How To Value A Business: Part 1
Business valuation often looks like a “black box” to those not involved in the profession of valuing companies. Entrepreneurs often ask, how do you value a business? In reality, value is a pretty simple concept. The value of any business, publicly-traded stock, or other financial asset is the sum of the present value of the … Continue reading How To Value A Business: Part 1
Discount Statistics Of Closed-End Funds Update For The 3rd Quarter 2012
This article will update the Highland Global study, “Discount Statistics of Closed-end Funds,” (originally published in November 2005 and updated quarterly) for data relating to the third quarter of 2012. The original article with more details regarding discount statistics of closed-end funds is available at http://www.HighlandGlobal.com. Historic releases of our research can be accessed from … Continue reading Discount Statistics Of Closed-End Funds Update For The 3rd Quarter 2012
Discount Statistics Of Closed-End Funds Update For The 2nd Quarter 2012
This article will update the Highland Global study, “Discount Statistics of Closed-end Funds,” (originally published in November 2005 and updated quarterly) for data relating to the second quarter of 2012. The original article with more details regarding discount statistics of closed-end funds is available at http://www.HighlandGlobal.com. Historic releases of our research can be accessed from … Continue reading Discount Statistics Of Closed-End Funds Update For The 2nd Quarter 2012
Selling Your Company
Introduction Business owners are confronted with a number of decisions each day that impact their business, the sum of which in the long-run, will have a significant impact on their lives. Over time, a privately-held business is likely to become the major asset of its owner. Given the tremendous financial, labor, and time investments that … Continue reading Selling Your Company
Valuation Disparities: Business Brokers v. Business Appraisers
Business brokers, business owners, and business appraisers often value the business differently. Business owners, in many cases, are biased in their views towards the firm, and therefore, have an inflated sense of value associated with the business. They value the business simply in terms of what dollar amount they want to realize from a transaction. … Continue reading Valuation Disparities: Business Brokers v. Business Appraisers
Earnings Assumptions: Common Errors
A business appraiser is confronted with many challenges with respect to developing earnings forecasts for a closely held or family controlled enterprise. This process may be complicated by ungrounded earnings forecasts provided by the executive management of the company. However, the skilled business appraiser typically will probe the financial engineering of the company’s management, leading to a … Continue reading Earnings Assumptions: Common Errors
Highland Global Business Valuations 