Business Valuation Blog
Maximizing Success in M&A Transactions: The Power of Independent Business Valuations
In the fast-paced world of mergers and acquisitions (M&A), success hinges on informed decision-making and strategic negotiation. An integral component of this process is independent business valuations—an invaluable tool for M&A advisors seeking to guide their clients through complex tran...Read More
Gift Card Liability When Valuing a Business
Recently, a lender (who now has become a client) came to us looking for a second opinion on a valuation of a Massage Envy Franchise. Their appraiser came back with a negative value conclusion which centered around deferred gift card liabilities transferring with the sale. We took a step-by-step rev...Read More
The Great Debate: Business Valuations With Or Without Inventory
Steve Mize, ASA
July 21, 2023
In small business transactions, purchase agreements can be written any number of ways. For those businesses that are dependent on inventory to generate revenue and cash flow, you’ll typically see the purchase agreements structured where the Price includ...Read More
What is Business Valuation? Why & When You Need One
Steve Mize, ASA
Business Valuations are critical for sale, transition, and business planning. If you're in one of these dynamic time periods in your own business, you may be left with the question, "What is business valuation?" Put plainly, a business valuation is the value that has been deter...Read More
Franchise Value: Post-COVID
One year later . . .and the small business acquisition market has changed significantly. COVID has impacted most businesses, positively or negatively. As a valuation firm, we are constantly being asked how COVID has impacted business values. Our response is not so simple, but let me try to ex...Read More
Valuation of a Personal Service Franchise in Today’s Market
Last year we wrote an article on how to value a “personal service” franchise. In the original article we discussed some of the concerns. One being a continued decline in revenue trends for this industry, due to competition and overall saturation in the market. Another, and more important...Read More
Deep Dive into Financial Statements with a Quality of Earnings Analysis
Jason Pagan, CPA
A Quality of Earnings (QoE) analysis is a deep dive into the financial statements to understand where the business generates value. The QoE is not an audit but rather a detailed financial analysis, and the two are not mutually exclusive but complementary.
An audit is ba...Read More
Gift Card Liabilities When Valuing a Business
Recently, a lender (who now has become a client) came to us looking for a second opinion on a valuation of a Massage Envy Franchise. Their appraiser came back with a negative value conclusion which centered around deferred gift card liabilities transferring with the sale. We took a step-by-step rev...Read More
GCF Business Valuation Celebrates Small Businesses
Earlier this month, our team celebrated National Small Business Week. This past year has been a turbulent time for business owners and the SBA lending community, and we are proud to be part of a resilient community.
Usually, National Small Business Week is hosted by the Small Business Asso...Read More
Business Assets: The lifeline you are looking for…
The COVID-19 pandemic has affected businesses globally in various ways -- both positively and negatively. For the businesses who were hit hardest, look no further than your tangible assets as a lifeline to ride out the storm from the pandemic.
Todd Taylor, EECA, Valuation Analyst & J...Read More
Different Types of Business Valuations – and How to Get There
Business Valuation Process Varies By Need
Darren Mize, ASA
What’s driving the request for a business valuation? Different circumstances call for a more – or less – comprehensive business valuation. Your specific need will determine both the timeline for a final report and the...Read More
What Factors Determine the Value of a Business?
Understanding the Business Valuation Equation
Steve Mize, ASA
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:
If there’s a...Read More
X Factors In the Business Valuation Formula
Professional Expertise, Insight, and Industry Experience Bring Crucial Context
Darren Mize, ASA
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 di...Read More
Is There a Preferred Approach to Valuing a Company For Sale?
Darren Mize, ASA
Let's review the 3 approaches to value:
Cost ApproachMarket ApproachIncome 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...Read More
“Add-Backs” and How They Impact Business Value
Steve Mize, ASA
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 exp...Read More
The #1 question to ask when determining contract value in business valuation
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 con...Read More
Beware of the so-called “Slam Dunk” deal
Steve Mize, ASA
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 su...Read More