This week’s article is by Mark S. Becker, Partner, CFO Edge, LLC.
The valuation of a closely-held business becomes a priority in a number of situations: selling, exiting or creating an ESOP, just to name a few.
When undertaking a valuation, it is critical to have financial statements that are up-to-date and GAAP-compliant, as well as a minimum of three-year financial projections.
Reviewed in this week’s full article…
…are critical success factors for an accurate valuation: its purpose, GAAP-compliant financials, the discount rate and the type: fair market, investment, intrinsic or fair value.
Combining the crucial elements correctly assures that a valuation is accurate. An understated valuation is costly to shareholders, and an overstated valuation isn’t attractive to potential buyers.
Los Angeles and Southern California business owners contemplating a valuation can benefit from talking with a provider of outsourced CFO services. An on-demand chief financial officer brings a proven record assessing discount rate factors and weighing relative merits of valuation methods.
A CFO professional works hand-in-hand with you and the valuation expert you select to navigate the valuation process and help realize the many benefits of an accurate business valuation.