Business Valuation Concepts

We routinely get asked questions about general valuation concepts – ranging from methods and models that we use to case law and certifications.  Each engagement is different – and every fact set is going to be different.  We approach every engagement engagement from the same view point: understand the fact set, understand the business, and apply the appropriate valuation methodology and framework.  Here is a bit of background on some of the more common items that come up.

Overview

Each firm takes a different approach to performing a valuation.  Our’s is geared towards getting to the heart of the matter – what is value? – quickly, with incisive analysis, and without an undue burden on the client.  We follow a consistent and structured approach- this helps us reduce the time it takes to complete projects and also reduce the potential for errors.  Read more about Quantive’s Business Valuation Process

 

Valuation Methodologies

Most often valuators refer to three different methods (or “methodologies” as we call them) to develop a value for a particular company.  There is no right or wrong methodology – rather the issue is selecting the best model for a particular situation.  A skilled and credentialed analyst is experienced at identifying the right model to fit the situation at hand.

 

Developing Discounts

There are many areas where “discounts” may be appropriate in a valuation.  Most often we see Discounts for Lack of Control (“DLOC”) and Discounts for Lack of Marketability (“DLOM”) applied to minority interested.  Estate Planning and Gifting happens to be one of the most common areas to take advantage of applying discounts.

Discounts for Control and Marketability

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