EBIT Associates provides independent and objective valuation opinion advisory services.
A company valuation commonly includes four major phases. Phase One typically consists of gaining a full understanding of our client’s requirements and the specific purpose of the business valuation. During Phase Two, our EBIT professionals will compile useful information about your company through the use of management questionnaires, interviews, document request lists, and facility tours. There are several factors EBIT considers when reviewing your company’s data during Phase Three. Some of these factors include economic factors, industry trends and influences, potential risk factors, and recent relevant transactions. Phase Four, the final phase, allows the EBIT team to test the validity of all assumptions and results, and review a draft report with the client. Only after all of these steps are complete will we issue the final report.
EBIT has developed a comprehensive process based on a Confidential Information Memorandum (“CIM”), which examines all the factors involved in determining your company’s valuation. Created in three sections, the CIM is a complete package of all the information necessary for a buyer to make an informed decision about buying a business.
Section One consists of general business information including the purpose of the business, marketing strategy, industry background, employees and facilities.
Section Two is financial disclosure. This covers three years of financial statements including balance sheets, profit and loss statements and tax and financial data also known as Quality Of Earnings (“QOE”).
Section Three provides market research. This section may be as large as a comprehensive opinion or as short as a single page showing bench market research.
Would you value these two companies the same?
|BUSINESS VALUATION – IS THERE AN EASY RULE OF THUMB?|
|REVENUE HISTORY||COMPANY A||COMPANY B|
|AVG. EQUIPMENT AGE:||3.5 YEARS||20 YEARS|
|OWNER’S CASH FLOW:||$1,250,000||$700,000|
|OWNER’S VACATION:||6-8 WEEKS||NONE|
|SIMILAR INDUSTRY AND CUSTOMER BASE, SAME AMOUNT OF REVENUES|
|COMPANY A||COMPANY B|
Overall, EBIT’s valuation professionals utilize advanced valuation techniques and an understanding of economic conditions to provide effective valuation service opinions.