September 15, 2020 Darren Mize, ASA Let’s review the 3 approaches to value: Cost Approach Market Approach Income Approach The Cost Approach The Cost approach relies on the business’s balance sheet. So, unless the company is heavily invested in assets this approach is rarely used. The Market Approach The Market approach relies on comparable business […]
Category: Blog
“Add-Backs” and How They Impact Business Value
Steve Mize, ASA September 1, 2020 One of the most challenging aspects of valuing a small business is the use of Income Statement Adjustments, otherwise known as “add-backs”. For smaller businesses add-backs are common, but can they be verified? Add-Backs – The Questions We’re Asking • Can the expense being added back be traced back […]
The #1 Question to ask on Contractor businesses
Jason Pagan, ASA How is revenue being booked on contracts? The short answer: When accounting for contractual work, how revenue and expenses are booked on time-based projects (that span longer than 60 days) will have a direct reflection on cash flow and business value. Why is this question critical to the value of the business […]
Beware of the so-called “Slam Dunk” deal
Steve Mize, ASA September 15, 2020 GCF was engaged to value a pharmacy and the lender quickly explained how “strong” the deal was even stating: “This is a slam dunk!” So, we began the due diligence process and immediately discovered: Profit margins well above the industry average. Initial thoughts suggested “compounding” (which typically carry a […]
