Fall 2003

Business valuation factors to consider

Attorneys and other valuation end-users should know the ingredients that ensure a thorough valuation. Though not comprehensive, here are several checkpoints from the AICPA’s business valuation toolkit:

• Stage of enterprise development,
• Marketplace and major competitors,
• Barriers to entry and exit,
• Competitive forces (potential competition and buyers’ and suppliers’ bargaining power),
• Existence of proprietary technology, product or service,
• Work force and its skills,
• Strategic relationships with major suppliers or customers,
• Major investors in the enterprise, and
• Cost structure and financial condition.

In addition, the toolkit highlights elements every business valuation report should include, a matrix that compares management’s responsibilities with those of the valuation specialist, a sample listing of contingent and limiting conditions and a glossary of BV terminology.

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The articles in this newsletter are general in nature and are not a substitute for accounting, legal, or other professional services. We assume no liability for the reader's reliance on this information. Before implementing any of the ideas contained in this publication, consult a professional advisor to determine whether they apply to your unique circumstances.

© 2003