Our management of the valuation process follows a set of procedures designed to ensure a thorough, well- documented analysis to support the value estimate. Our number one priority is to exceed our clients’ expectations by offering a quality and defendable expert report or valuation report.
Background
Introductory discussion with the client to understand the client’s business and the situation that might lead to the need for formal valuation.
Business Engagement
Preparation of a proposal or engagement letter which will set forth the services, schedule, fees, assumptions and limiting conditions, and those deliverables the client can expect to receive at the conclusion of the engagement. Once the terms are agreed upon, the client signs the letter, which serves as the engagement letter.
Analysis
Although there is no single “correct” method for determining fair market value, there are three generally accepted approaches to valuing a business or intangible asset. The income approach uses one or more methods that consider the anticipated benefits to be realized and the conversion of these benefits into a value. The market approach uses one or more methods that compare the subject company to similar “guideline” companies, businesses or transactions. The asset based (cost) approach is premised upon the value of the subject firm’s underlying assets, or the cost to replace. Utilization and assessment of any one or combination of these approaches, coupled with an estimate of discounts and premiums and any other relevant adjustments, form the framework for our value conclusion.
Report
Depending on the report format requested, the report either describes, summarizes or states the assets valued, the methods and information used in the analysis, and the conclusion of value.
Assessment
Further discussion with the client to present the services that would satisfy the client’s needs, identify what is to be valued, and determine the purpose of valuation, valuation date, standard of value and appropriate fees.
Research
Develop an understanding of the client’s industry, environment, business, and the assets (i.e., stock, etc.) to be valued. This will usually involve a visit to the client’s facilities, the submission of a client information request list in anticipation of the visit, and independent research on the client’s industry and business environment. Extensive relevant and available information must be collected, considered and analyzed as part of this process.
Support
Work papers are maintained to provide detailed support to the valuation analysis and substantiate our position in litigation, tax, regulatory or other situations, should they arise.