Business Valuations

A business valuation, or company valuation, is a process that determines a company’s fair economic value by closely examining all areas or departments of the business. This process is done to determine the company’s sale value, establish a partner’s ownership, taxation, mergers, or divorce proceedings.

At Godbold, Romanov & Love CPAs, there are several methods of business valuations we can conduct for our clients, including:

• Market capitalization, one of the simplest methods, calculated by multiplying the company’s share price by its total number of outstanding shares.
• Times revenue, when a string of revenues is generated over a certain amount of time.
• Earnings multiplier, which is often used to get a more accurate value of a company.
• Discounted Cash Flow, based on projections of future cash flows and adjusted to get the current market value.
• Book value, or the equity shown on the balance sheet statement.
• Liquidation value, or the net cash that a business will receive if its assets were liquidated and liabilities were paid off today.
• Replacement value
• Breakup value
• Asset-based valuation

If you would like to sit down with us to discuss how we can help you with your tax and accounting needs, contact us for a free consultation.