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.
WHAT’S IT WORTH TO YOU?
THE BUSINESS VALUE IS THE BUSINESS OWNER’S MOST IMPORTANT ASSET
A business valuation provides the business owner with multiple facts and figures regarding the actual worth or value of the company in terms of market competition, asset values, and income values.
WHY DO I NEED A BUSINESS VALUATION?
Here are some common reasons that a business owner or individual may need a business valuation:
- To set a basis of value for a business when no valuation has been previously performed.
- To understand the value (worth) of the business.
- To evaluate an offer and negotiate a strategic sale of a business.
- To determine the annual per share value of an Employee Stock Ownership Plan (ESOP).
- For exit strategy planning purposes.
- To identify weaknesses in a business to refocus the operational efforts.
Every single business owner should know how much their business is worth. It’s the only measure that takes into consideration where your company has been, where it is today and, most importantly, where it’s going in the future.
Talk to an expert at EBIT Associates to help you determine what your company is worth.