Practical aspects of business valuation

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This is the agenda for Module
Module Session
Module 1
Introduction to business valuation

• Introduction
• What is a business valuation?
• What is fair market value?
• When is a business valuation required?
• Business valuation principles
• Determining going-concern value
• Engagements, reports, and valuator liability

Module 2
Asset (liquidation) value methods

• Introduction
• Liquidation value: Definition and uses
• Lquidation value calculations
• Tangible asset backing (TAB)
• Special problems in asset valuation

Module 3
Going-concern valuation methods — Part I

• Introduction
• Capitalized earnings method

Module 4
Going-concern valuation methods — Part II

• Introduction
• Goodwill
• Redundant assets
• Summary of capitalized earnings method
• Capitalized cash flows method
• Market prices/rules of thumb
• Other methods
• Other valuation factors

Module 5
Assets versus shares in the buy/sell transaction

• Assets versus shares
• Vendor’s alternatives
• Purchaser’s alternatives
• Comprehensive example

Module 6
Discounts and premiums on rateable share values

• Introduction
• Definitions and terms
• Discounts: When applicable
• Premiums
• Shareholder agreements
• Minority oppression

Module 7
Assets redundant to the operation

• Definition and identification
• Effect on earnings and measurement of FMV
• Effect on earnings multiplier and TAB
• Recognition of income taxes
• Hidden redundancy


Appendix A
Suggested readings

Appendix B
Qualitative factors for capitalization rate selection