Valuation Services
Closely held companies by definition, do not have a public trading market from which to assess their value. Further, private companies usually work to minimize taxes leaving records of earnings which understates true value. "X" times earnings is deceiving or too broad to have real meaning. SVI will assign an appropriate value using proven methodology techniques such as the excess earnings method.
In this method, earnings are "normalized" or "stabilized" to eliminate one time charges and owner withdrawals in excess or normal market wages. After other adjustments to restate normalized earnings and after completing the valuation, SVI checks that the buyer earns reasonable returns on first year proformas. This, then, becomes a defensible market valuation which can be negotitated with numbers to potential buyers.
Let SVI show you how to get the most for your company and how to set up a secure future with the proceeds.
Valuation
In finance, valuation is the process of estimating the potential market value of a financial asset or liability.
Discounted Future Returns
The Discounted Future Returns method of valuing a company is at the other extreme. An in depth analysis will include discounting at 5 different discount rates to present value at least 10 years of forecasted earnings, pessimistic, most likely and optimistic. The result is a range from highest valuation (optimistic at low discount) to lowest valuation (pessimistic forecast at highest discount rate).
Broad Valuation
A multiple on earnings has become a common method for a broad valuation and is often used within a 3x to 5x range as being applicable to all companies. It is too broad and not fair to any specific company and should be used as a guide only.
