Knaub & Company, P.C.

certified public accountants

PO Box 161030, Big Sky, MT 59716

Phone: 406-995-6040

Fax: 406-993-2772

Email: knaubco@3rivers.net

March 2018

Valuing Your Business

Article Image

If you had to sell your business today, would you know how much it is worth? Would you know how much your business is worth if you needed a loan? How about the value of your business so you can take on a partner?


Talk to the Experts


Understanding the dollar value of a company is crucial to business owners, who may have an outsized portion of total wealth tied up in their companies. But the process can seem daunting to the uninitiated.
Begin by talking to a tax professional who is experienced in this area, or consider hiring a valuation expert with credentials from the American Society of Appraisers, the Institute of Business Appraisers or the National Association of Certified Valuators and Analysts.


Tangibly Speaking


While there are a variety of valuation approaches, they all quantify tangible assets. This is basically a company’s net worth, which includes ownership of physical assets such as machinery, equipment and work space. As with personal net worth, you would also subtract liabilities, including outstanding loan balances and depreciation.


Intangible Assets


While calculating the value of tangible assets is relatively straightforward, determining the value of intangible assets might take more doing. Intangible assets include things like copyrights, patents, licensing, franchise agreements, and goodwill.


Goodwill


Ultimately, reputation can make or break a company’s long-term prospects, and goodwill includes the components that affect that reputation. Goodwill includes your company’s standing among customers and peer firms. It can include the quality and experience of your workforce and relationships with suppliers.
Establishing Value


Add both tangible and intangible assets to your firm’s balance sheet, which lenders, partners and future buyers may use to determine its value. It can show you areas like inventory purchases where you can increase value, or it can identify areas such as liquidity ratios that might detract from value. Talk to us to learn more.


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox every month.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.